About Agmoos

I am a journalist writing primarily about agriculture for various newspapers over the past 30 years...and before that, I milked cows and tended calves and heifers. I am also a mother and grandmother with three grown children: A teacher, restaurateur and homemaker. Our two sons and one daughter all like to cook and they are food conscious... not paranoid. My "foodographic" Agmoos blog is a place to find stories and photos of the people and places behind the food we eat and for commentary and analysis on food, farm and marketing issues facing producers and consumers.

Helene leaves tragic losses, devastating conditions across the Southeast; Farms and dairies see significant impacts

Posted on October 11, 2024 by Agmoos

A dairy farm in Haywood County, North Carolina moves their whole herd to another farm. Photos like these only scratch the surface of a wound likely much deeper.

By Sherry Bunting, Farmshine, October 4, 2024

In what will go down as one of the deadliest of hurricanes to hit the Southeast U.S., Helene left a path of tragic loss and destruction spanning 900 miles from landfall over portions of 10 southeastern states.

Tragically, the death toll has risen above 160, with hundreds of people still missing.

Entire communities, communications and infrastructure have been wiped out, especially in parts of western North Carolina and eastern Tennessee, where 35 to over 40 inches of rainfall in a 24-hour period brought record flooding of biblical proportions to mountain towns.

While the category four hurricane damaged coastal towns in Florida’s big bend, it quickly trekked north to dump all of that moisture, creating flash floods and wind damage in southern Georgia and Alabama, and unfathomable destruction in mountain towns of Appalachia.

The overall estimates continue to grow in terms of estimated cost and the sheer scope of the ongoing emergency. The full extent is unknown due to impassable roads and the inability to communicate. The pressing needs are basics, like food, water, medicines, fuel, generators.

Extensive damage to crops in affected areas include pecans, peaches, other fruits, cotton, peanuts, as well as any unharvested corn and soybeans already suffering from drought.

There are as yet uncounted livestock losses, farms sustaining loss of stored feed, and along with crop losses, washed out pastures.

One dairy farmer reported his pasture of cows were swept away by the flood, with a few surviving. A video captured in east Tennessee shows the power of water, carrying a large barn filled with 500 round bales away from its footers.

Jay Moon has a dairy farm in north Georgia; he reports that people from south Georgia are coming north for food, and essential supplies are dwindling in affected and non-affected areas just as humanitarian efforts are able to ramp up.

Moon also works for USDA Farm Service Agency. What he sees as the primary concern is communication and travel that are necessary to both assess and reach farmers with assistance. For now the focus is on clean up and infrastructure and finding ways to get the essentials to people.

“I think there is a lot going on that we do not know about due to no phone service,” says Moon. He and his wife drove to south Georgia where her parents live. “It’s hard to understand how bad it is. Some areas you still can’t get to.”

Georgia Milk Producers executive director Bryce Trotter reports that over 20 dairy farms have been impacted from significant wind damage to freestalls and parlors, to downed fencing, missing roof-tin, and some mangled center pivots.

All 20 were still without electricity five days after the hurricane swept through and are operating on generator power where possible. Most have a generator running the parlor, refrigeration system and wells.

Communication there is difficult, and GMP is working to coordinate with farmers via text messages and to arrange fuel deliveries and find generators for those needing them for their dairies. This will be a pressing issue throughout affected communities in the Southeast.

The storm’s path from Valdosta, Georgia, north of Augusta has also taken down transmission lines and cell towers, and smaller communities outside of Augusta may be without power for more than a week.

“It’s going to take time to dig out from this,” Trotter wrote. “There will be downed trees and debris piled up for a very long time. Augusta is the second largest metro area in Georgia.”

He said this is ‘déjà vu’ to 2018’s Hurricane Michael, except that one moved east, not west.

As rough as it is in Georgia, the situation is quite dire for those in western North Carolina and eastern Tennessee. Communities and infrastructure throughout the great Smoky Mountains have been either severely damaged or completely wiped out.

One dairy farmer in that region responded to a Farmshine message to verify that he is okay, but there were many fatalities in his community, and they have sustained serious property damage. The roads are impassable, and so they are having to dump their milk.

Reports indicate that dairy farmers in western North Carolina are having to move cattle from flooded and damaged facilities. Farms have reported losing cattle, though numbers are not known at this time. Some have reported losing all of their feed and pasture.

It will take years for western North Carolina and east Tennessee to recover from this as the damage and extent of the situation is difficult to describe as the full extent is yet untold because of the inability to fully communicate and connect with the outside world.

From forestry services to infrastructure engineers to Starlink satellite trucks to Red Cross, Samaritan’s Purse, and all manner of humanitarian food aid groups are just beginning to filter into the hardest hit areas, which is challenging in the mountain communities of Appalachia cut off by mud- and debris-covered or completely washed out roads and bridges.

In conjunction with Plain Compassion Crisis Response based in Honey Brook, Pennsylvania, Blessings of Hope based in Ephrata, with a warehouse also in Kentucky, has taken three trucks filled with food and disaster relief supplies and other critical items to western North Carolina. The plan is to continue with a truck a day.

American Farm Bureau reports the devastation in rural and farm communities has been widespread, and it will be weeks—possibly months—before knowing the full impact of the storm. AFBF has organized a list of non-profit aid organizations on the ground helping the farming communities impacted by Helene, go to https://www.fb.org/issue/hurricane-helene

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Concerning surprises in FMMO proposed rule; Comments due Sept. 13th

Posted on September 12, 2024 by Agmoos

By Sherry Bunting, Farmshine, Sept. 6, 2024

EAST EARL, Pa. – “Those who don’t learn from history are doomed to repeat it.” That was the theme of the American Dairy Coalition’s webinar on the USDA’s proposed Federal Milk Marketing Order (FMMO) pricing changes, which I participated in last Thursday, August 29^th.

Over 125 people participated, including state dairy and state farm bureau organization leaders and individual producers. American Farm Bureau economist Danny Munch helped producers understand the proposed changes and walked through the areas of mutual concern. Other panelists offered information, and participants’ questions were addressed.

“This webinar was a grassroots dairy producer undertaking,” said moderator Kim Bremmer of Wisconsin-based Ag Inspirations. “ADC planned it to make sure dairy farmers have a way to ask questions before the public comment period closes on Sept. 13th. We know the last update to milk pricing occurred in that 2018 farm bill, and that was without your input, and it cost dairy producers over a billion dollars across the country. It is really important that your voices are heard.”

Four primary areas of concern were discussed: the processor make allowance increase, the size of the whey make allowance relative to the price, delayed timing of beneficial updates to milk composition, and the surprising 2-mover system for Class I, effectively adding a 5th class of milk to the FMMO pricing scheme.

A 2-mover system was not vetted during the very lengthy USDA hearing. It appears to be “thrown in” as a last-minute compromise to appease processors investing in extended shelf life (ESL) fluid milk capacity.

Nestle and Fairlife had testified to sales volume growth when they offered 9 to 12-month flat-pricing after the average-of was implemented in May 2019. They said they must have average-of pricing to manage their risk so they can offer long-term pricing to grow sales.

Make allowance increases quite large

USDA proposes to raise processor make allowance credits by 29 to 33% above the current level. That equates to a 75-cents to $1.00 per hundredweight new deduction from milk checks, embedded in the pricing formulas, depending on how the milk was utilized.

Munch said make allowances are part of the formulas that start with surveying market prices for the four base commodities – 40-lb cheddar cheese blocks, butter, nonfat dry milk, and dry whey. USDA works backwards from the surveyed price to derive a value for the raw milk.

He used a cartoon imagining of “little Zippy selling cheese at his cheese stand.” (a light-hearted reference to AFBF president Zippy Duvall, a former dairyman).

“USDA is surveying the volume and value that he is selling it at — out in the marketplace — and then is using that price to derive a raw milk price,” Munch said, explaining that, “working backward, there has to be a part of the formula that accounts for the cost for Little Zippy to convert the raw milk into the cheese. He uses non-dairy ingredients like cultures and salts. It’s his own labor as well as overhead and equipment that he uses to convert raw milk into cheese. In the FMMO system, that deduction that accounts for his costs is called the make allowance,” he continued.

But today, the Little Zippys of the dairy industry are not so little, and they report much less on the USDA price survey, and they make so much more of the products that are NOT price-surveyed. These other products — such as mozzarella cheese, pizza cheese, other non-cheddar cheeses or cheddar cheeses in other bulk package sizes, whey protein concentrate, skim milk powder, whole milk powder, unsalted butter, and on and on — are not part of the formula and do not contribute value to the farmer’s milk check. Class I and II products are not price-surveyed either.

“When we look at the surveys, so many things are made out of the wonderful perfect nutrition of milk made on our farms, so what is the percent of products that are actually represented in the surveys?” asked Indiana dairy producer Sam Schwoeppe, who moderated the webinar Q&A

Survey volume quite small

Munch said the volume captured is “quite small and declining” to 14.8% in 2022 after being a high of 26.4% in 2002. “But those are just the products that are actually surveyed. There’s a lot of products that are not even surveyed, and that means the percent is even less.”

American Farm Bureau, American Dairy Coalition, and others pushed for some other bulk products to be added, but those proposals were rejected in this USDA decision.

So, how can current make allowance levels be too low when processors are spending billions to expand? Or, are dairy farmers expected to pay this debt service?

Dr. Michael Dykes, the CEO of the International Dairy Foods Association (IDFA), representing processors, told dairy farmers at the Georgia Dairy Conference in January 2024 that, “7 billion in new processing investments (below) will be coming online in the next two to three years. There’s a lot of cheese in those plans. These are going to be efficient plants. You’re going to see consolidation.”

The proposed make allowance increases of 5 to nearly 7 cents per pound across the four commodities equate to a new embedded milk check deduction of nearly $1.00 per hundredweight for Class III and around 75 cents for Class IV – over and above the current make allowances that already equate to $2.20 to $3.40 per hundredweight. Class I would see this embedded in advance skim and fat pricing factors that are used to set the base price mover.

Collectively, the make allowance increases could remove $1.25 billion annually from FMMO pools, Munch showed in a 5-year static analysis based on prior pool composition, (See chart at top). Other aspects of USDA’s full proposal will defray some or all of the loss, mainly in the FMMOs with more Class I utilization. USDA’s proposal includes increases in location differentials for Class I fluid milk.

What happened in 2008-09?

Learn from the past or be doomed to repeat it? The last time make allowances were increased in 2008, a dairy market crash followed. As a webinar panelist and ag journalist, I pointed out that the dry whey price fell below the dry whey make allowance for the first seven months of that implementation from October 2008 through April 2009, resulting in penalties deducted from milk checks on every pound of other solids in the milk.

This time, the proposed dry whey make allowance is the largest of all – up 33.2% from $0.1991/lb now to $0.2653/lb. If in effect a year ago, dairy farmers would have again seen negative other solids penalties on their milk checks in July and August 2023 when milk prices were at their lowest. Meanwhile, processors made less dry whey, instead making more value-added products that are not price-surveyed.

Munch noted that only 66% of the plants on the price survey actually participated in the voluntary cost survey used by USDA to set the proposed new make allowances. AFBF, ADC and other organizations have been on record opposing make allowance increases until mandatory, audited surveys are conducted by USDA.

Conversion from fresh milk to ESL?

Learn from the past or be doomed to repeat it? On the Class I side, the 2018 farm bill changed the base price calculation. Farmers were told this would be revenue neutral, but the change cost them – at minimum — $1.25 billion over the past five years.

USDA now proposes to restore the higher-of calculation, but only for conventionally pasteurized HTST (or fresh) milk. Extended shelf life (or ESL) fluid milk products — labeled good for 60 days or more — would be priced using a new average-of method with a rolling adjuster.

Shouldn’t ESL have been defined in the hearing, and the economic impacts studied? This idea of two different Class I movers was not vetted in the hearing.

With two movers, fluid milk costs could be different from the same location based on shelf life. Webinar comments questioned USDA’s loose definition of ESL; Could processors change the label to move between the movers and pay whichever mover was lower?

The USDA’s one-year static analysis showed the ESL Class I mover would have ranged from being $1.18 per hundredweight over to 95 cents under the HTST Class I mover in various months of 2023. That’s a big spread.

What’s at the root here? The dairy checkoff has openly identified ESL milk as the new milk beverage platform, using dairy farmer funds to research and promote it and to show consumers can be ‘taught’ to accept it.

Dr. Dykes of IDFA, at the Georgia meeting in January 2024, also told dairy producers that “this is the direction we (processors) are moving… to get to some economies of scale and bring margin back to the business.” He said the planned new fluid milk processing capacity investments are largely ultra-filtered, aseptic, and ESL. (10 of the 11 fluid milk plants on the IDFA map above are ESL and/or aseptic fluid milk plants. Some will also make ultrafiltered milk, and some will make plant-based beverages at the same location.)

Has USDA considered the purpose of the FMMO system is to promote orderly marketing and the adequate supply of FRESH FLUID MILK? Will consumers accept the taste of the not-so-fresh ESL and aseptic milk, or migrate faster to other beverages if fresh fluid milk is less available to them?

Would a 2-mover system ultimately reduce farmers’ access to milk markets in some regions and diminish the food security of those consumers? Prized as the freshest, least processed, most regionally local food at the supermarket, will the USDA decision reduce fresh fluid milk availability down the road?

How will the 2-mover system impact dairy farms located outside of the industry’s very specific identified growth centers? And will this perpetuate the wide divergence between Classes III and IV that has been an issue since 2019, further punishing dairy farmers with disorderly marketing and opportunistic depooling?

Webinar participants asked: “Will commenting even matter? Or is the USDA Secretary’s mind made up? How important is individual farmer input?”

“It’s extremely important for farmers to get involved. Even with talking points, really tell your own story with it,” said Munch. “They like hearing from you, and the stories of the impacts to your balance sheet, to your future revenue or the stability of your local community. They want to know the impact on small businesses. That’s one of the driving points.”

Not much time

With a short time remaining to comment at the Federal Register Docket AMS-DA-23-0031-0002.

American Dairy Coalition has prepared an official comment, so other like-minded organizations and individuals can sign on before the filing deadline, which is 11:59 p.m. Friday evening, Sept. 13, 2024.

Comment directly to the Federal Register docket at https://www.federalregister.gov/documents/2024/07/15/2024-14769/milk-in-the-northeast-and-other-marketing-areas-proposed-amendments-to-marketing-agreements-and

Click here to read the ADC’s comment that will be filed before the deadline Friday evening at Sept. 13 at 11:59 p.m. Dairy farmers and organizations wanting to associate themselves with the comment can click here.

Click here to view ADC’s Aug. 29 webinar.

Click here to read Danny Munch’s at Farm Bureau Market Intel.

Why the proposed 33.3% raise in the whey make allowance is way too big without a ‘snubber’

Posted on August 10, 2024 by Agmoos

By Sherry Bunting, Milk Market Moos in Farmshine, Aug. 9, 2024

USDA’s weekly National Dairy Product Sales Report (NDPSR) is out of whack on whey. The NDPSR is the mandatory processor survey of prices on the four commodities used in Federal Milk Marketing Order (FMMO) end-product pricing formulas.

The NDPSR price for dry whey for the week ending Aug. 3 was $0.4672/lb, a modest improvement of a half penny over the previous week’s NDPSR, but still 10 to 14 cents lower than the past three weeks of weighted average spot prices, and a nickel lower today than even at the start of the spot market rally six weeks ago.

The NDPSR should have caught up closer to the spot market by now, considering that only sales that are forward priced within 30 days can be reported.

The CME spot market is what processors touted during FMMO hearing testimony as the ‘market clearing’ price that they use as a baseline to price commodities for export and non-formula, non-reported ‘value added’ products.

They also lamented — at length — that USDA is setting producer minimum prices too high, some threatening to modify future expansion plans if they don’t get to ‘market clearing levels’ with higher make allowances deducted for their rising costs — including ‘sustainability costs’, they want covered.

If these dry whey ‘market clearing’ CME spot values we have been seeing of late are not translating to the NDPSR used in FMMO class and component price formulas over a three to six week period, then maybe we should all be questioning the 33.3% raise the processors will be getting from dairy farmers’ milk checks in the dry whey make allowance that USDA proposes to increase from the current $0.1991/lb to $0.2653/lb. That is, if the proposed rule announced July 1st survives the 60-day comment period, 60-day review, and producer referendum early next year.

I wonder if USDA underestimates how fed-up the farmers are in the Upper Midwest with being the worst-paid in the nation seeing the biggest make allowance bite coming right at them in this proposal — and very little Class I benefit to offset it. After 5 years of disrupted pooling by the ‘average of’ method, Order 30 has developed some bad pool-jumping habits that could linger in that region — even when fluid milk pricing returns to the higher of. Who knows?

If a two-thirds ‘yes’ vote is not achieved in Order 30, or any Order for that matter, the Market Administrator’s office there closes, immediately.

There is so much value in whey today, and it’s a byproduct of the cheesemaking process to begin with. It’s hard for this observer to resolve conflicts of logic in the size of this raise that USDA justifies based on voluntary surveys in which only a fraction of the plants that price report would offer their cost of processing data to determine.

In fact, even Dr. Mark Stephenson said it was more challenging this time to separate-out the costs for other products that are not price reported, but made in the same plants. He said today’s plants are more complex than in 2006 when the model was used on voluntary data to set the current make allowances that were implemented in 2008, the last time they were raised.

But folks, there’s no snubber, and for dry whey, that’s a problem. When farmers were losing their shirts last summer, they would have been giving away the ‘other solids’ in their milk for free — or paying processors a small fee to take them as though worthless — because the dry whey price at that time was equal to or fractionally less than what the new proposed dry whey make allowance would be!

It happened the last time make allowances were raised in 2008, just ahead of the 2009 dairy crisis. I’ll not soon forget farmers asking me if there is some way to avoid sending the ‘other solids’. Of course, that’s silly, but we get the point, and it’s sharp.

This is significant in the Upper Midwest, where it impacts over 90% of the milk because it’s a Class III market. But this also affects all Orders to some degree, depending on pool composition. With new processing capacity coming online, much of it cheese, in the next 12 to 24 months, other milk marketing areas will see Class III growth change their blend prices too.

The other thing to think about is USDA proposes to implement the new make allowances for all four commodities right away after the referendum in early 2025, but some of the other parts of the proposed rule will be delayed because of risk management impacts. Yet make allowances also impact risk management. They are also part of the formula for the Class III and IV milk prices — so this change also would immediately affect the futures board. In fact, that’s part of what happened in 2008.

Can you imagine an immediate $0.75 to $1.00 drop on the futures board due to higher processor credits? What’s the calculus there? The make allowance for dry whey affects the ‘other solids’ value as well as the Class III price.

And then we have the added insult of ‘pizza cheese’ being billed as ‘like mozzarella’ just moister because it’s a second process of the whey and water to congeal some secondary curd. It is essentially whey cheese with a different melting texture (I notice it browns cardboard-flaky on frozen pizza before the dough is done, but keeps some moisture. I don’t buy my once favorite frozen pizza brands anymore suspecting that’s the problem). It’s also used as a crust filler.

So, how much real mozzarella is being displaced, and how much near-mozz value are they selling this whey product for? That’s a price that never gets reported because it’s — well — not dry whey. It’s a proprietary value-added product.

The ubiquitous whey protein concentrates and isolates found in so many high protein drink and snack preparations are another hot ticket not getting price reported. And yet, here’s dry whey at 50 to 60 cents/lb for 6 weeks on the market-clearing CME, and the price going into the FMMO formulas is hanging back at 43 to 47 cents/lb over the same 6 week period.

Spot market red, not as bad as it looks

The whey market traded 6 loads on the CME spot sessions this week with a penny loss at 59 cents/lb Wed., Aug. 7 vs. the prior Wednesday. The weighted average for the week is still at just about 60 cents/lb.

The CME spot cheese market was mostly quiet again this week, but prices for blocks moved higher Wed., Aug. 7, when 40-lb block Cheddar was pegged at $1.9650 — up 4 cents from the prior Wednesday, with 4 loads trading the first three days. The 500-lb barrel cheese price, pegged at $1.95/lb was down 2 1/2 cents compared with a week ago; 3 loads traded. The NDPSR for week ending Aug. 3 was reported in reverse with a 4-cent barrel over block advantage at $1.9788/lb and $1.9390/lb, respectively.

Butter melted off 2 cents after last week’s 39-load haul came to a grinding halt Aug. 1st. Nothing traded from Aug. 2 through 7, and the spot butter price remained at $3.1025/lb Wed., Aug. 7. The weighted average was steady at just over $3.10/lb, off 3 cents from the NDPSR price of $3.1315/lb for week ending Aug. 3.

Grade A nonfat dry milk trade remained active the first three days this week with a whopping 23 loads changing hands, and the spot price pegged at $1.23/lb Wed., Aug. 7, down a penny and a half from the prior Wednesday. The weighted average for stood at $1.2317, and the NDPSR price continued to lag the past few weeks of spot market levels by three cents.

We see these headlines that the recent gains in farm milk prices are taking away the U.S. competitive advantage on the world market. Don’t believe them, folks. While it is true that nonfat dry milk is running above the global skim milk powder price, the reason is because we are not making nearly as much milk powder in the U.S. because milk is tight, cheese capacity has expanded, and cheese-vats are pulling in the available milk. Fluid milk sales are also up year over year. We are also not building powder inventory, so of course this means we’ll export less.

On the cheese and whey, there’s plenty of wiggle room between U.S. and global prices, judging by the recent Global Dairy Trade auction.

Global Dairy Trade index up 0.5%

The GDT biweekly internet auction on Tues., Aug. 6 added value to the mid-July gain — up 0.5% vs, July 16.

Here’s the kicker. The cheese index for Sept. 2024 through Feb. 2025 delivery was higher than the current U.S. market-clearing block and barrel prices. Meanwhile, lactose outpaced the current NDPSR drag on whey.

The big story is bulk mozzarella was up a record 8.4% with all sales contracted for delivery October 2024. The bulk mozzarella contracts are new. They have only been trading on the GDT since December 2023. Tuesday’s sales — all for Oct. 2024 delivery — are, by far, the highest yet of the 15 sessions in which bulk mozzarella was offered. The CME does not have a U.S. ‘clearing market’ for mozzarella. Furthermore, USDA does not include bulk mozzarella in the mandatory NDPSR weekly survey because mozzarella prices are not used in the FMMO milk pricing formulas. A proposal to add this was rejected by USDA in its recommended decision July 1st.

The GDT Industrial bulk cheddar index was up 1.3% compared with three weeks ago at an average $1.94/lb — 2 cents higher than the weighted weekly average on CME barrels and 4 cents over CME blocks. September delivery cheddar averaged $1.90/lb and October dipped to $1.89/lb, but product for delivery Nov. through Feb. moved toward $1.98/lb.

Meanwhile, USDA agreed with NMPF’s proposal to remove the 500-lb barrel cheese price from the weighted average used in the FMMO formulas. This will mean only the 40-lb block cheddar price will be used in the future to calculate the protein and Class III milk prices. Barrels have been trading over blocks recently, and during the FMMO hearing, IDFA witnesses (opposing the change) said they use the barrel price and dry whey price as the basis for pricing U.S. mozzarella for export sales.

Higher GDT indexes were also achieved Tuesday on the following products: Whole milk powder up 2.4%, averaging $1.48/lb; Anhydrous milkfat powder (AMF) up 1.2%, averaging $3.14; Lactose up a whopping 16%, at 42 cents/lb. Lower indexes were reported on Skim Milk Powder (SMP) down 2.7%, averaging $1.15/lb; and Butter down 2.4%, averaging $2.99/lb.

Milk futures mixed

Class III milk futures were generally steady this week, except near-term September took a 45-cent hit and 2025 contracts were mostly firm to a nickel higher, spots up 15 cents. Class IV futures were steady through 2024, but 10 to 30 cents lower on 2025 contracts. On Wed., Aug. 7, Class III milk futures for the next 12 months (Aug24-Jul25) averaged $19.41, down 3 cents from the same 12 months averaged on the previous Wednesday. The 12-month Class IV average at $20.82 was down a dime.

June DMC margin $11.66, up $8.00 above year ago program lows

As expected, the June DMC margin came in at $11.66, which is $2.16 above the highest tier one coverage level of $9.50/cwt. Announced August 2nd, the June margin was based on an 80-cent higher All-Milk price at $22.80/cwt and a 34-cent drop in feed cost at $11.14/cwt for a DMC margin that was deemed $1.14 higher than May and up by a whopping $8.00/cwt above year-ago program lows set in June and July 2023 at $3.65 and $3.52.

30-day H5N1 detections at 36 in 6 states, Colorado continues to be a breaking hot-spot, Iowa drops from the list, South Dakota returns

As of August 9, 2024, the current confirmed cases of H5N1 in dairy cows within the past 30 days stand at 36 herds in 6 states. Of these, 28 are in Colorado, where the most recent slew of 12 detections were reported for Aug. 5 and 6. Colorado remains the hot spot by a long shot. The state issued an order July 22nd to require mandatory bulk tank milk testing.

Iowa dropped from the 30-day list this week, but South Dakota returned to the list with 2 detections. Other states with confirmed cases within the past 30 days are: Minnesota (1), Idaho (1), Texas (2), and Michigan (1). Cumulatively, since the beginning of the outbreak on March 25, 2024, there have been 190 detections in 13 states.

Enrollments in the national voluntary dairy herd status bulk tank testing include 24 herds: Michigan (10), New Mexico (4), Pennsylvania (3), and 1 herd each in Kansas, Nebraska, North Carolina, Ohio, South Dakota, Tennessee, and Texas. Colorado herds (110) are now all being bulk-tank tested due to the state’s mandatory ruling on July 22.

Milk Market Moos: Could farmers be PAYING processors to take milk’s ‘other solids’ like in 2009 after the last ‘make allowance’ raise?

Posted on August 2, 2024 by Agmoos

By Sherry Bunting, Farmshine, August 2, 2024

No ‘snubber’ on USDA’s higher whey make allowance proposal

The whey market is the one to watch right now as the daily CME spot market sped higher again this week, and the dry whey spot price is now above the 60-cents-per-poind mark!

No ‘snubber’ on new whey make allowance means farmers would have PAID processors to take the ‘other solids’ in their milk last summer.

One thing for the industry and USDA to keep in mind regarding the proposed rule announced July 1 is that the higher make allowances, if implemented, include a nearly 7-cents-per-pound raise in the dry whey processor credit. That can be a real bully when markets go south — considering there is no ‘snubber’ to keep farmers from having to give away these ‘other solids’ or to PAY processors to take them as though worthless.

USDA is proposing to increase the dry whey make allowance from $0.1991/lb to $0.2653/lb — a nearly 7 cents per pound jump.

Farmers would have PAID processors to take other solids last summer

Guess what? If we were having this conversation a year ago, looking at July 2023 Class and Component price announcements, we would be writing in this column that your ‘other solids’ price would be essentially zero, meaning processors would get the lactose and whey free, and last August, if the proposed new whey make allowance was in effect, farmers would have paid processors $0.003 to take these components as if they are worthless.

If the proposed 7-cents-per-pound increase in the dry whey make allowance were in effect in July and August 2023, the new $0.2653/lb make allowance would have been at or slightly higher than the dry whey price for those two months.

When the make allowances were raised in 2008, we saw months in 2009 when farmers literally paid their milk buyers to take the other solids in their milk because the dry whey price had fallen below the then-new make allowance, and there was no snubber to stop the bleeding at zero.

July Butterfat up at $3.57, Protein slips to $1.95

USDA announced mixed trends on July 31 for the Class and Component prices used in Federal Milk Marketing Orders for July milk. Class II and IV at $21.82 and $21.31, respectively, were around 20 cents per cwt higher than a month ago and 20 to 70 cents higher than the July Class I base price ‘mover.’

Class III milk, at $19.79, slipped 8 cents from June and continues to be the lowest of the four classes as it has been for most of the past two and a half years.

All components were higher, except for protein, which slipped 10 cents per pound back under the $2 mark at $1.95/lb. Butterfat gained 3 cents at $3.57 for July. Solids nonfat also gained, valued at just over $1.00 per pound for July.

Other solids also gained, at 26 cents/lb. This is derived from the dry whey price vs. make allowance.

June All-Milk price up 80 cents at $22.80, fully $5/cwt above year ago

USDA announced the All-Milk price for June at $22.80, up 80 cents from May and fully $5 higher than a year ago. The national average butterfat test moved down 0.07 at 4.10, but was still 0.09 above year ago. The Pennsylvania All-Milk price for June, at $23.30, was also 80 cents higher than the previous month, and fat test fell by 0.06, reported at 4.01, just 0.01 above year ago. The June DMC margin was not published or available by press-time, but with a higher All-Milk price for June announced at 3 p.m. July 31st, and moderating feed costs, the June DMC margin is likely to be well above the $9.50 trigger margin at around $11.50/cwt. (Update, June DMC margin was announced Aug. 2 at $11.66).

Milk futures mostly higher, especially Class IV

Class III milk futures were mostly higher this week, except near-term September and October were down a few cents per hundredweight. Class IV futures were steady to higher across the board. On Wed., July 31, Class III milk futures for the next 12 months (Aug24-Jul25) averaged $19.44, down 2 cents from the Jul24-Jun25 average on the previous Wednesday. The 12-month Class IV average at $20.92 for the 12 months Aug24-Jul25, also 2 cents below the Jul24-Jun25 average a week ago.

Whey and powder skyrocket, but formula price survey lags

Trade was active with high volume movement on Class IV products, butter and nonfat dry milk powder. Trade was light for Class III products cheese and whey.

The whey market is again the big story as the daily CME spot market continues trading at price levels well above the weekly National Dairy Product Sales Report (NDPSR). The NDPSR prices are the ones that USDA collects in mandatory processor pricing surveys to use in the Federal Milk Marketing Order end-product pricing formulas. The NDPSR whey price is the one USDA AMS plugs into the FMMO pricing formula for Class III and ‘other solids.’

While spot bids for dry whey rallied to a whopping 62 cents per pound Wednesday, July 31, with 3 loads trading the first three days this week, and the weekly average price at 60 cents… the NDPSR for week ending July 27 is still back at 46 cents/lb — a 14-cent per pound deficit vs. the spot market, and 9 cents lower than the previous week’s spot market.

The CME spot market for cheese was mixed with the barrel premium over blocks widening to 7 cents per pound this week as barrels traded firm while blocks moved lower. In the weekly NDPSR, barrels are a scant half-penny higher than blocks.

The CME daily spot market for 40-lb block Cheddar was pegged at $1.9150/lb Wed., July 31 ($1.93/lb average for the week). This is 2 1/2 cents lower than the prior Wednesday with 3 loads trading the first three days this week. The 500-lb barrel cheese price, pegged at $1.9750/lb was unchanged compared with a week ago; 3 loads traded Monday through Wednesday.

The NDPSR for week ending July 27 pegs block cheese at $1.9482/lb and barrels at $1.9533/lb.

In the Class IV product complex, butter firmed up to move higher this week, shrugging off the Cold Storage Report indicating inventories were running 7% above year ago at the end of June. A whopping 26 loads of butter were traded on the CME cash market Monday through Wednesday this week. On Wed., July 31, the spot price was $3.1275/lb — up nearly 4 cents from the previous Wednesday with the weighted average for the week just over $3.10/lb — right where the NDPSR butter price landed for the week ending July 27.

Grade A nonfat dry milk trade was active again this week on the CME spot market, advancing to $1.2450/lb by Wed., July 31, up another penny from a week ago with a whopping 20 loads changing hands the first three days.

Contrary to historical patterns, the NDPSR moved the opposite direction. Again, this is the price used in FMMO pricing formulas. Nonfat dry milk for the week ending July 27 hung back at the $1.18 mark, declining a penny from the prior week despite the 7-cent spot market advance last week. CME spot prices are now at a 6-cents-per-pound premium over the NDPSR.

Total packaged fluid milk sales in May continue outpacing year ago

U.S. fluid milk sales continued outpacing year ago in May, according to the USDA’s Estimated Total Packaged Fluid Milk Sales Report released last Friday, July 19.

The report showed May sales were up 0.3% compared with a year ago, following the big 5.9% jump in April. In fact, fluid milk sales have been higher year-over-year (YOY) for six of the past eight months.

Year-to-date (YTD) sales continue to beat year ago, up 1.3% for the Jan-May period, and when adjusted for Leap Year, YTD 2024 sales are up 0.6% vs. 2023.

Leading the charge again is the largest volume category: conventional whole milk sales, up 1.8% YOY in May, plus organic whole milk sales, up 28% YOY in May.

Conventional whole flavored milk sales were down 13% from a year ago in May — a function of what fat percentage is offered, not necessarily what consumers may have selected — as the reduced fat (2%) flavored milk sales rose 3.5% in May. By contrast, organic whole flavored milk sales were up 31% YOY in May.

Total Organic fluid milk sales of all fat levels were up 6.3% in May YOY and up 7.8% (Leap Year Adjusted) for the first five months of 2024 vs. year ago. They represent 7% of the YTD total of all fluid milk sales.

The ‘other fluid milk products’ category continues to make double-digit percentage gains, up 45% YOY in May and up 37% (Leap Year Adjusted) YTD vs. year ago. This category represents 2.2% of total fluid milk sales. The report does not separate out the ESL products in each fat percentage; however, lactose-free milk brands are included in the ‘other products’ category.

Year-to-date milk production down 1%

U.S. milk production fell 0.8% in June compared with a year ago, despite the national herd reportedly having 2000 more milk cows than a year ago, according to USDA’s monthly milk report this week. The report also revised the May total lower by another 0.2% or 30 million pounds.

Year-to-date milk production for the first half of 2024 is down 0.3% compared with the first half of 2023 even with an extra day of production in 2024! When adjusted for Leap Year, first half 2024 milk production trailed year ago by 1%. It would not be surprising to see USDA come back and trim the June tally lower, later.

In the Northeast and Midatlantic Milkshed, Pennsylvania’s production fell 2.2%, Vermont down 2.8%, and New York down 1.2%.

In the Southeast, Florida gained 4.9% with 4000 more cows while Georgia dropped 8.1%, losing 8,000 cows, and Virginia saw a 4.3% drop in production vs. year ago.

The Mideast Milkshed declined with Michigan down 0.9%, Ohio 0.6%, and Indiana 1.6%, with just a 1000-head loss in cow numbers across the three states.

In the Upper Midwest and Central Plains, Iowa grew production by 1.2%, despite being hit with bird flu in June, Minnesota was down 1%, South Dakota up 8.3%, and Wisconsin up 0.9%.

Western States saw production declines, except for Texas up 3.1% with 13,000 more milk cows than a year ago.

DMI / NMPF talk supply and demand

Fluid milk, yogurt, butter and other than American-type cheese all posted positive annual growth in domestic commercial use during the March-May 2024 period, according to the July edition of the joint DMI and NMPF market report released July 23rd. The report cites significant export growth for all types of cheese and whey protein concentrate and isolate. However, when looking at domestic and export sales of all products combined, the usage is described as “relatively flat to lower” in the March through May period.

The DMI / NMPF report observes that U.S. milk production has nearly had a year’s worth of volumes charting below prior year levels, but “continued increases in average component composition of producer milk has enabled U.S. dairy farmers to supply available demand for dairy products while keeping inventories of key products relatively stable,” the report stated.

Overall supply-and-demand balance in the industry has been good enough to move dairy product and dairy farm prices and margins higher in recent months, without significantly reversing the gradual reduction trend in retail dairy product prices that has occurred over the past year, according to the report.

While dry skim milk usage is down 48% in the March-May period, this is a function of the lower production of skim milk powder (down 24.5%) and nonfat dry milk (down 12.5%). Inventories at the end of May trailed year ago by 4%. Domestic and export markets can only ‘use’ what is ‘produced’ and available in a commodity category in the first place.

But the DMI / NMPF market report did not even mention imports… So here’s the deal:

The U.S. imported 41% more Whole Milk Powder in first-half 2024 vs. 2023,
up 150% vs. 2022!

While U.S. milk production has trailed year-ago levels for the past 10 consecutive months, U.S. food manufacturers have been quietly ramping up imports of whole milk powder (WMP), which is essentially whole milk, dried.

WMP imports were running 170% above year ago, cumulatively, for the first four months of 2024. May and June totals have slowed down from the huge front-loaded volumes January through April. Still, the cumulative year-to-date WMP import volume at 5.5 million pounds for the first six months of 2024 is 41% greater on a volume basis compared with a year ago.

This is a stunning increase because the Jan-June 2023 WMP import volume was already 77% greater than the first six months of 2022. This means Jan-June Whole Milk Powder (WMP) imports have grown 150% in two years. That’s a volume increase of 1.49 million kgs or 3.29 million pounds. WMP is basically farm milk from another country, in bulk dried form, not a specialized product. It can be used in processing virtually any dairy product, containing all of the milk components — both fat and skim solids.

Total non cheese imports at 10.4 million kgs (21 million pounds) for the first half of 2024 are up 5.9% vs. 2023 and up 41.4% vs. 2022.

Cheese imports, on the other hand are up slightly from a year ago (1.4%) and down 6.27% from 2022.

On the export side of the ledger, the U.S. sold 2% less total milk solids volume overseas in May, which is mainly because skim milk powder, whole milk powder, and other milk protein powder exports were down 8 to 12% from a year ago. Butterfat exports were down 16%.

Cheese exports, on the other hand, were up 27% in May and dry whey product exporter were up 6%. Fluid milk and cream exports were up 2%.

This makes sense because the U.S. dairy processing paradigm has shifted. The U.S. is making less butter and powder (Class IV) and more cheese and dry whey (Class III).
The U.S. is consequently exporting less milk powder and butterfat (Class IV) and exporting more cheese and dry whey products (Class III); while at the same time importing more whole milk powder and non cheese products, while cheese import volumes remain stable.

30-day H5N1 detections drop to 33 in 6 states, hot spot Colo. requires milk testing

As of July 31, 2024, the current confirmed cases of H5N1 in dairy cows within the past 30 days decreased to 33 herds in 6 states. Of these, 24 are in Colorado, the hot spot by a long shot. The state issued an order July 22nd to require mandatory bulk tank milk testing, except raw milk dairies, which are encouraged to do so voluntarily.

Other states with confirmed cases within the past 30 days are: Minnesota (3), Idaho (2), Texas (1), Iowa (1), and Michigan (1). Cumulatively, since the beginning of the outbreak on March 25, 2024, there have been 173 detections in 13 states.

Enrollments in the national voluntary dairy herd status bulk tank testing include 21 herds: Michigan (7), New Mexico (4), Pennsylvania (3), and 1 herd each in Kansas, Nebraska, North Carolina, Ohio, South Dakota, Tennessee, and Texas.

Will we see PA milk bills moove?

The Pennsylvania State Assembly has a few dairy bills waiting to moove on through both chambers again towards the end of a two-year legislative session. We’ve seen this movie before, where the House votes to allow Pennsylvania whole milk produced on Pennsylvania dairy farms to be served in Pennsylvania schools, and where the House votes to allow the state-mandated Pa. Over Order Premium (OOP) to be collected and distributed to farms by the state instead of leaving it open to loopholes that strand the dollars through creative cross-border deals.

In prior years, such milk bills would move through Committee and even get passed by the House, only to be stuck in a chairman’s desk drawer in the Senate. If we look back far enough in the history of milk bills in the Pennsylvania legislature, we see on other occasions a long awaited milk bill passed the Senate only to be stalled out in the House. Will this year be any different? Who knows? Election years are funny-seasons.

Earlier this month, Senators Elder Vogel and Judy Schwank, the chair and ranking member, respectively, of the Senate Ag Committee introduced legislation to allow the state to collect the state-mandated OOP and distribute it to farmers. A similar bill had been introduced in the past two legislative sessions on the House side by Rep. John Lawrence, but Vogel and Schwank were unconvinced to move it in the Senate.

This time, Vogel and Schwank are introducing the measure after many years of multiple hearings, task forces, and other such discussions of what on earth to do about the state-mandated OOP to make sure all of it — 100% — gets into the pockets of Pennsylvania dairy farmers, as intended.

The Vogel-Schwank rendition would “empower” the Pennsylvania Milk Board (formerly known as the Pennsylvania Milk Marketing Board) to administrate the process of collecting and distributing the premium with involvement of the Pa. Dept. of Revenue. The state would distribute the funds to farmers, milk handlers and dealers using a formula that includes cost of production, price received, and other measures.

The current method of distribution only follows the $1 premium for milk that is produced, processed, and sold in Pennsylvania, but consumers pay this $1.00/cwt premium within the minimum retail price set by the Pa. Milk Board for ALL milk sold at retail in Pennsylvania — no matter where it comes from.

For decades the debate over the Pa. OOP has had its moments where farmers thought a change would come to prevent significant gamesmanship stranding millions of dollars in premiums intended for the dairy farmers.

Yes, I am cynical. We are five months away from the end of a 2-year legislative session and four months away from an election / re-election. Forgive my gut reaction: Ho-hum…. here we go again… time and money spent on spinning this wheel of fortune. Not buying it. Stay tuned.

In June, the Senate Ag Committee passed SB 1229, which would allow the Pa. Dept. of Agriculture to provide financial assistance to dairy farmers who enroll in the federal dairy margin coverage (DMC) program.

Editorial: ‘Wouldn’t it be great if we could unite the country with whole milk?”

Posted on July 29, 2024 by Agmoos

By Sherry Bunting, Farmshine July 26, 2024

‘Wouldn’t it be great if we could unite the country with whole milk?”

Those words were messaged to me by a friend and colleague a year ago, right after the Whole Milk for Healthy Kids Act had passed the House Education Committee in bipartisan fashion before the overwhelming passage on the House floor Dec. 13, 2023 and before Senate Ag Chair Debbie Stabenow (D-Mich.) blocked it the next day, Dec. 14, 2023.

This was my first thought, when former President Donald Trump announced Senator J.D. Vance of Ohio as his running mate in the Republican campaign. (Vance is an early cosponsor of S. 1957, the Senate’s whole milk bill.)

Like others, I’ve been involved in the effort to bring the choice of whole milk back to schools for more than a decade. It’s about natural, simple goodness — to simply strip away the federal ban and allow hungry, learning children to be nourished by milk they will love.

Looking back at the years of this long fight, I realize that if it’s so painstakingly hard to get something so simple and so right accomplished for America’s children and farmers, we’ve got problems in this country.

With President Joe Biden now withdrawing from the campaign for a second term, and Vice President Kamala Harris as presumptive nominee launching her campaign this week in the Dairyland State, I’m reminded of where she stands on such things.

Harris is no friend to livestock agriculture. She was an original cosponsor of the Senate version of “The Green New Deal.” She has strong positions on climate change that may lead to harsher rules on methane emissions and water consumption in the dairy industry, while perhaps promoting methane digesters, which are not an equitable nor necessary solution. Cows are NOT the problem!

Some in the dairy industry are on record stating that this would be good for dairy because the DMI Net Zero goals fall in-line and tout some of the same objectives. But no matter how you slice and dice all the fancy offsets, insets, innovations, grants, projects and the billions of dollars, the bottom line leaves cattle holding the bag.

Cattle are in the crosshairs of a very long game set to control land, food and people.

Harris has already indicated she would use the Dietary Guidelines to reduce red meat consumption on the basis of this erroneous climate impact claim about cattle that we are all being brainwashed to quite literally buy into.

As a presidential candidate in 2019, in a CNN town hall, she was specifically asked: “Would you support changing the Dietary Guidelines to reduce red meat specifically to reduce emissions?”

“Yes, I would,” Harris replied, with a burst of laughter.

It’s not funny.

Earlier, she had said she “enjoys a cheeseburger from time to time,” but the balance to be struck is “what government can and should do around creating incentives, and then banning certain behaviors… that we will eat in a healthy way, and that we will be educated about the effect of our eating habits on our environment. We have to do a much better job at that, and the government has to do a much better job at that.”

Read those words again: “creating incentives and then banning certain behaviors.” In plain English, that means dangling the carrot and then showing us the stick.

Harris joins Senators like Ag Chair Stabenow, as well as Bob Casey from Pennsylvania, as card-carrying members of perennial Ag Secretary Vilsack’s food and climate police.

Not only is Ag Chair Stabenow blocking the whole milk bill in her Committee, she is dragging her feet on the critical farm bill.

As President Biden’s approval ratings fell, there were indications she would bring her side of the aisle to the table to negotiate a compromise to get the farm bill done this year.

Now that Biden has withdrawn from the race, and the pundits, media, and party organizers are breathless with excitement over Harris as presumptive nominee, it appears that the farm bill negotiations between the Committee-passed House version, the Republican Senate version and the Democrat Senate version have fallen apart.

House Ag Chair G.T. Thompson (R-Pa.) has called upon his colleagues to get to the table and do the work because a perfect storm is brewing in Rural America as net farm income is forecast to fall by 27% this year on top of the 19% decline last year.

Meanwhile, there is political upheaval everywhere we look. Seeing Vance picked as Trump’s running mate and knowing he was among the early cosponsors of Senate Bill 1957 – The Whole Milk for Healthy Kids Act – offers some hope.

That bill — in true bipartisan spirit — was introduced in the U.S.Senate in June 2023 by Senator Dr. Roger Marshall (R-Kan.) with prime cosponsors Peter Welch (D-Vt.), Ron Johnson (R-Wis.), Kirsten Gillibrand (D-N.Y.), Chuck Grassley (R-Iowa), John Fetterman (D-Penna.), Mike Crapo and James Risch (R-Idaho), Susan Collins (R-Maine), Angus King (I-Maine), and Cindy Hyde-Smith (R-Miss.). The bill eventually earned cosponsorship from other Senators, including the influential Democrat from Minnesota, Amy Klobuchar.

Vance signed on as cosponsor on December 14, 2023, one day after the U.S. House of Representatives had passed their version of the bill by an overwhelming bipartisan majority of 330 to 99.

The Senate bill 1957 is identical to the successful House whole milk bill H.R. 1147, which was authored by Pennsylvania’s own Representative GT Thompson.

GT is a man of courage, conviction, compassion, of humility and humanity. I’ve heard him say more than once: “God gave us two ears and only one mouth for a reason.”

He is a determined man, doing the work. He included whole milk bill in the House Committee-passed farm bill. He’s standing firm on his pledge to put the farm back in the farm bill. He is concerned about the financial crisis in agriculture on the horizon, and held a hearing July 23 with witnesses from agriculture and banking giving stark warnings.

Even though whole milk choice in schools seems like a minor issue in the grand scheme of things today, it is really a linchpin. If we could just get something with broad bipartisan support accomplished, this could lead to other steps on common ground.

Cows are not the climate problem. Cows are a solution. Cows are part of a carbon cycle, they don’t take carbon out of the ground and put new carbon into the air.

Carbon is essential to life. It seems that those seeking full control of land, food, and people, are starting with carbon.

As the whole milk choice remains hung up in the Senate, let’s pause to think about how ridiculous it is that we adults get to choose, but our growing children do not. For them, whole milk is banned at two meals a day, five days a week, three-quarters of the year at school. (The federal government, via USDA school lunch rules, only allows fat-free and 1% milk to be offered with the meal or even a la carte.)

Maybe the Harris ticket would like to ban food choice behaviors for adults as well.

We have Republicans and Democrats supporting whole milk choice in schools. Both parties say they care about our nation’s farmers and ranchers who feed us and are the backbone of our national security.

Let’s take that and run with it.

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Ag hearing: ‘Perfect storm’ could ignite farm financial crisis, House Ag Chair GT expresses frustration over Senate playing politics with farm bill

Posted on July 29, 2024 by Agmoos

By Sherry Bunting for Farmshine, Aug. 2, 2024

WASHINGTON, D.C. — The extended 2018 farm law will expire Sept. 30 in the throes of a tumultuous election year while farm liquidity and cash flow decline in the face of an eroded farm bill safety net.

Witnesses before the House Ag Committee July 23rd were (l-r) Dr. Dana Allen-Tully for Minnesota Corn Growers, David Dunlow for American Cotton Growers, Tony Hotchkiss for Ag and Rural Bankers, Joey Caldwell for the Ag Retailers Association, and University of Arkansas ag economist Dr. Ron Rainey. Hearing livestream screen capture

Witnesses in a July 23 House Ag Committee hearing expressed support for the House bill and made it clear that another extension is a non-starter, with one witness describing the current law as facing a category-five hurricane with no protection.

“Unprecedented challenges are facing the entire agricultural sector, threatening to ignite another farm financial crisis,” said House Ag Chairman Glenn ‘GT’ Thompson (R-Pa.) as he opened the hearing on financial conditions in farm country.

USDA estimates net farm income will see the steepest drop of $43 billion this year – down 27% from 2023 and down 40% from 2022. In its report, USDA notes that livestock farms will also see net cash farm income drop for 2024 across all specializations. Within the livestock sector, dairy farms are forecast to see the largest decrease in average net cash farm income in 2024.

“The impact won’t be fully understood until early next year when farmers are unable to secure operating loans because they can’t cash flow,” said Dr. Dana Allen-Tully, member of a diversified crop and dairy farming family near Eyota, testifying for Minnesota Corn Growers.

In addition to flooding in her region and drought elsewhere, crop producers face income losses of $150 to $233 per acre, she said, citing plummeting prices, high costs of production, doubling interest rates, natural disasters, and tightening credit.

Thompson said these factors create “a perfect storm that will compromise the foundation of our agricultural economy.”

He observed U.S. agriculture is in the largest two-year decline in farm income, and by the end of 2024, total farm sector debt will be the highest since 1970.

“Unfortunately, the farm safety net has not seen significant investment since 2002. The lack of support for those that feed the world is unacceptable,” the Chairman said, pointing to the many farm bill listening sessions across the country.

According to Thompson, the bipartisan House Committee-passed Farm, Food and National Security Act of 2024 represents the largest permanent farm bill investment in over two decades for the farm safety net, conservation, trade promotion, specialty crops, research, and livestock biosecurity.

“It will give renewed strength… just when producers need it most,” he declared, taking aim at “pundits spreading misinformation about this bill in order to sow division.”

Thompson said Democrats in Congress have “unilaterally added billions to climate and conservation programs, and the current Administration added one-quarter of one trillion dollars to nutrition programs — all while ignoring the farm safety net.”

“I will not apologize for advancing a bill that seeks to put the farm back in the farm bill. I am tired of the politics and gamesmanship, and I know folks out in the countryside are too,” he said.

Thompson stated further that this work has been “saddled with a meddling Senate Democrat and others who do not seem to appreciate the dire circumstances in farm country.”

The “meddling Senate Democrat” is Ag Chairwoman Debbie Stabenow (D-Mich.), who is retiring at the end of 2024 and is also responsible for holding hostage the Whole Milk for Healthy Kids Act.

As recently as last week, some Ag Committee Democrats have expressed a preference to see a farm bill fail before engaging in the process, Thompson reported, adding that his door remains open “to renegotiation from any partner willing to come to the table with a serious proposal — not more red lines.”

He stressed the difficulty in reconciling a bipartisan 900-page House bill with a partisan 90-page Senate summary.

“For negotiation to be viable, Chairwoman Stabenow needs to unveil her bill text,” he challenged.

During the hearing, witnesses cited meaningful improvements to the safety net via updates to reference prices, crop insurance, and the conservation title.

Both the current 2018 law and the incomplete Senate summary do not meet the needs of farmers, witnesses indicated. Even the stronger safety net in the House bill is not enough, they said, but would help farmers weather the storm.

While pundits say the House bill cuts nutrition programs, Thompson has repeatedly demonstrated no program cuts in the bill, even though the Congressional Budget Office (CBO) score showed $30 billion in savings on the 10-year baseline compared with earlier scores.

Nutrition Title spending accounts for nearly 80% of the estimated $1.5 trillion total farm bill. Nutrition spending also increases by 73% ($484 billion) since the 2018 farm bill enactment.

“Quite frankly, we are not going to have nutrition, if we do not have farmers, so our investment here is in the farm safety net,” Thompson stated.

The House farm bill seeks a stronger farm safety net within a shrinking piece of the total farm bill pie. Senate Ag Committee minority graphic

Ranking member David Scott (D-Ga.) emphasized in his remarks the Democrat position that CCC authority remains “exclusively in the hands of the Secretary of Agriculture,” without the congressional oversight proposed in the House bill.

The witnesses didn’t bite when asked about this. Several indicated it is more desirable to have a stronger safety net so the CCC does not have to be dipped into in the first place.

At the same time, witnesses indicated the need, now, for supplemental intervention under the current price squeeze.

To that point, Rep. Mark Alford (R-Mo.) asked: “Did you know we are losing 1000 farms every month in America right now? It’s a staggering number when we consider our food security and our national security.”

“Working capital is fast depleting,” Dr. Allen-Tully testified. She called John Deere’s layoffs “a canary in the coal mine” and warned against another farm bill extension because “it won’t stop the hemorrhaging. Even a new farm bill with a strong safety net may not be timely or sufficient, though I pray Congress will pass a new farm bill this year because it will help in the long run.

“We put everything on the line for a thin and often negative margin. Young people aren’t going into farming, and that’s why the average age of farmers is nearing 60… no parent wants their kids to go through life facing constant worry. We need our full-time farm and ranch families,” she said.

North Carolina farmer, David Dunlow testified for American Cotton Growers. He noted the size of operating loans farmers in all commodities take on every spring, and the lines of credit with input companies.

“That has to be paid back – every year — before we can go and get another operating loan,” he said. “The margins are very thin … under normal conditions, and with the economy now, nothing cash flows. It’s very difficult to get those loans paid and to move on to the next year.”

Testifying for the Ag and Rural Bankers, Tony Hotchkiss said lenders are seeing changes. Farmers are working through liquidity faster than anticipated and are now beginning to leverage equity through refinancing debt. This is further challenged by the cash flow needed for the refinancing payment.

“This has made ag bankers feel as though they are looking over the cliff,” Hotchkiss stated, stressing the need for ag policy changes, many of which are included in the 2024 House farm bill.

Joey Caldwell of GreenPoint Ag Holdings in the Southeast U.S., testified for the Ag Retailers Association. He said a strong farm bill safety net is critical to Rural America: “If the farmer is not successful, the supply chain is not successful, and this impacts the very fabric of our communities.”

University of Arkansas ag economist Dr. Ron Rainey also testified that farm debt levels are increasing as divergence between input costs over ag prices is widening, even if the overall price indices are higher.

He said more farmers need to be involved in using risk management, whether that is through better subsidy levels or technical assistance to enhance understanding and use of it.

“If they don’t have crop insurance, and if they are outside of the safety net, then they’re financing their risk on their balance sheets. The more we can move from ad hoc disaster assistance, the better off the farmers are,” said Dr. Rainey.

“But where we are now… that’s going to require some intervention. That’s just the bottom line,” he added.

Rep. Eric Sorenson (D-Ill.) brought up sustainable aviation fuel and the inequity in how current Energy Department tax credits are given for ethanol from Brazil and used cooking oil from China, while American farmers, who can serve this need, are getting nothing.

“Sustainable aviation fuel is one of the most exciting things coming as a corn farmer,” Dr. Allen-Tully replied. “But the way the Treasury Department has their guidance written excludes us. It is almost insulting to believe that we would bring in sugarcane ethanol in place of ethanol we can grow here.”

Rep. Mary Miller (R-Ill.) asked witnesses how the climate policies of the current administration are affecting farmers, and she gave her own opinion as a farmer: “It’s painful.”

Caldwell responded, pointing to energy and fertilizer as the largest costs, and they are much higher under these policies.

“Farmers need a strong farm bill,” said Caldwell. “When a farmer plants a crop, they put more than their job at risk. It is their home, their livelihood – a pillar of their community. For many, it is also their family legacy, passed down through generations that they hope to pass on to their kids… they risk losing it all.”

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State Vet: Early H5N1 detection key to protecting dairy, poultry

Posted on July 11, 2024 by Agmoos

By Sherry Bunting, Farmshine, July 12, 2024

HARRISBURG, Pa. – Pennsylvania State Veterinarian Alex Hamberg stressed the importance of early detection and wants to step up voluntary milk sample surveillance for the highly pathogenic avian influenza (HPAI H5N1) in dairy cows, according to comments on the July 10 Center for Dairy Excellence monthly HPAI industry call.

There have been no detections in Pennsylvania dairy herds and no active poultry detections at the present time. Hamberg wants to keep it that way, and he wants to make sure that if the virus surfaces here, it is his office — working in collaboration with dairy farmers — that are the ones who detect it, by being proactive.

A scenario playing out right now in Colorado gives clues about why.

Colorado has had 30 dairy herds affected since April, the most of any state, representing more than one-fourth of the 110 dairy farms in the 13th ranked milk state, where the average herd size is 1827 cows. Of the 30 total herds affected since April, 25 were in the past 30 days, and three in the past week.

Colorado also has the most poultry flock infections in the past 30 days — one layer operation and three meat growers (two turkey). Two workers in Colorado, one in 2022 on a poultry farm and one recently on an affected dairy, were confirmed with the virus, but recovered quickly. Public risk is extremely low do to food safety protocols, testing, and pasteurization. Precautions are in place for those working closely with infected animals, including PPE states are making available through USDA, such as eye and face protection, gloves and disposable overalls.

Even though Colorado has had bird flu in poultry locations (and wildlife) across the state since the worldwide outbreak began in 2022, the recent detections in dairy cows and poultry appear to be occurring in the northeast part of the state, especially in Colorado’s number one dairy and poultry county.

In fact, on July 9, the Colorado Governor declared a disaster for Weld County, which was necessary to receive federal support to take mitigation steps and depopulate 1.8 million layer hens on an infected poultry farm neighboring an infected dairy operation.

Michigan and Texas are not out of the woods. On July 8, the APHIS 30-day ‘situation’ status showed 48 herds in six states had H5N1 in the prior 30 days. Michigan was down to one and less than a week away from being dropped off the status map. Texas was down to two and 10 days away. But on July 9, the APHIS update showed both states had a new case, and Colorado had three new ones.

This put the 30-day status at 53 herds in six states, which dropped to 49 herds in six states on July 10. The U.S. total since March 25 is 146 dairy herds in 12 states.

“The positive thing is that once a herd tests positive, it is then tested on a regular basis. In Ohio, for example, there are no more cases. This shows the possibility of getting rid of this in dairy,” said Dr. Ernest Hovingh, PADLS director.

For poultry, however, the risk is ever-present with no reprieve since this particular HPAI outbreak began in 2022. It continues to be found on poultry farms and in wild birds, worldwide, according to USDA veterinarian Dr. Michael Kornreich. He reported eight commercial flocks and four backyard flocks have been detected in the past 30 days, nationwide.

Unlike dairy cows that mostly recover, HPAI is lethal to poultry. A positive test means the whole flock is promptly depopulated, and quarantine zones are established. This is a big concern for the Ag Department in Pennsylvania, where the 2022 Ag Census showed poultry surpassed dairy as the number one ag product.

Hamberg described a scenario that has occurred in at least one state where both dairy and poultry are currently affected: “Dairies waited to report sick cows for testing. By the time they did, other dairies were infected, and poultry had become infected.”

He observed that the virus appears to be shedding in milk up to two weeks prior to clinical signs in cows. Anecdotal evidence suggests that workers had conjunctivitis (pinkeye) before cows showed clinical signs in herds at the beginning of the outbreak, Hamberg noted.

“Early detection is important not just to protect our own dairy farms but also our neighboring poultry operations. If you suspect HPAI, report it, work with us, and we will work alongside you to address it and protect you,” he said. “This is why we need the surveillance data.”
To-date, one Pennsylvania dairy farm has enrolled in the voluntary PA Lactating Dairy Cow Health Monitoring Program to achieve ‘monitored herd’ status.

In a separate program, one Pennsylvania processor has enrolled in testing at the milk hauling level.

Dairy farms can enroll online. They will receive a box with everything needed to collect and ship bulk tank samples at no cost. As a ‘monitored herd,’ they avoid pre-movement testing for interstate cattle transport.

Three consecutive weekly bulk tank samples are collected, followed by testing of a few animals from the sick pen to achieve ‘monitored herd’ status. Continuing the weekly bulk tank testing will continue the ‘monitored’ status. If a positive is detected, the farm keeps its ‘monitored’ status, and any movement or biosecurity concerns are addressed between the Dept. of Agriculture and the farm management.

What researchers know at this point is “transmission from farm to farm is heavily driven by ‘fomites.’ That means people, equipment, and animal movements,” said Hamberg.

“Robust testing helps us figure out where it is, to eliminate it by counter measures. We can do that while it is still definitely controllable, and not in a wildlife reservoir. But if it spills back into wild birds and circulates in them again, we may have a bigger problem,” he explained. “We need surveillance data to figure out where it is. If that is all negative, that’s great news. If we get a positive or two, we know we are doing something and have a chance to contain it.”

Could early detection have changed the course for the dairy/poultry interplay unfolding in Colorado? “Maybe,” said Hamberg. “There was no sharing of workers between affected farms, but there was cohabitation — poultry workers living with dairy workers — and this is a known transfer mechanism. Early reporting might have made a difference in that.”

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While fakes campaign to BE ‘milk’, dairy checkoff aims to REINVENT milk. New ‘milk beverage platform’ deemed ultrafiltered, ESL, shelf-stable

Posted on July 4, 2024 by Agmoos

As new milk beverage platform is developed, it sounds to me like people want the many attributes fresh whole unfooled-around-with fluid milk already delivers. It checks all the boxes! Maybe children just need to be allowed to have whole milk at school and daycare where they eat most of their meals, and maybe new generations of adults need the education about why and how the dairy protein and natural nutrition in real milk beat the imposters, hands down.

By Sherry Bunting, republished from March 2023 editions of Farmshine

SAVANNAH, Ga. — Dairy checkoff-funded researchers say a new milk beverage platform is being developed to provide “the keys to the kingdom.”

Their consumer studies show people want clean labels, and at the same time they want more attributes. On the one hand, they want energy and protein. On yet anotherhand, they want indulgent creaminess.

Consumers also want flavor, but they want less sugar. They want sweeteners, but not artificial sweeteners. They want thickness without the thickeners. They do not want gums or gels, but they are okay with fibers and starches.

Some consumers want higher protein products. Others want everyday nutrition that is reasonably priced.

These are some of the highlights that were shared back in January 2023 during the Georgia Dairy Conference in Savannah. There, Dr. MaryAnne Drake, professor of food science at North Carolina State University and director of the Southeast Dairy Foods Research Center talked about the fluid milk innovation work funded through DMI.

The ‘new milk beverage platform’ leverages different processing applications for flavor and functionality around dairy protein, based on global protein trends in a rapidly growing nutritional drink market.

ESL shelf-stable milk: key to kingdom?

“We are after a shelf-stable milk that tastes great and meets our consumer’s sensory needs and our industry’s sustainability needs,” said Drake about the work of the four university research centers, including North Carolina State and Cornell, that are drilling into milk’s elements to sift, sort, and test different combinations, as part of the checkoff-funded Innovation Center for U.S. Dairy, under the DMI umbrella.

Through processes like membrane technology, ultrafiltration, and aseptic packaging, the physical, nutritional and sensory elements of milk are being isolated at a molecular level to create beverages that aim to deliver this broad list of what consumers say they are looking for.

At the same time, researchers are using interpretive surveys to understand how consumer desires actually translate into purchases, and then work with processors to build relationships with retailers to get these new beverage products into stores.

Reinventing milk

What does all of this mean? Reinventing milk by focusing on the domains in which real milk has a clear advantage for consumers among so many plant-based and now cell-based options.

For example, said Drake: “Consumers want to know from a credible source what the immune-boosting elements are in milk, not what we have added. They tell us they want to know the science. That’s new.”

Drake explained that the findings from their interpretive surveys represent a huge and divergent set of innovations to sort through and capitalize on as part of a new strategy.

“Consumers don’t see the perceived value of animal protein vs. plant protein, so we had them graph what they want and don’t want, what they know and don’t know,” she said, adding that consumers gave the slight edge to plant protein over dairy protein. They rated the top three protein categories as plant protein, whey protein, and milk protein — in that order. (A large percentage believed whey protein is plant protein.)

As their familiarity with the differences between plant and animal protein increased, their liking of dairy protein increased, the researchers learned.

In other words, consumers do not know the science about the nutritional differences between plant and animal protein, and if they knew the differences, they would rank milk protein as number one.

Clearly, this is a failure in consumer education and messaging. Isn’t that the domain of the dairy checkoff?

New strategy

Drake indicated that educating consumers about dairy protein as a ‘complete protein’ is one thing that can help. However, she said, the functionality around dairy protein is the innovation strategy that is being pursued by the industry.

“The number one label claim consumers are looking for in a protein beverage is ‘naturally sweetened.’ We own that, and this is where we can deliver,” Drake declared.

“We own protein functionality. We understand the process parameters that impact flavor and functionality, and we can leverage this over plant proteins on this platform,” she said.

Bottom line: The surveys and flavor panels showed that consumers want “desirable flavor, texture and appearance. They want a protein drink that is nutritious, naturally sweetened, and has a clean label with simple ingredients,” said Drake.

“They also want education, messaging and positioning, and they are looking at sustainability,” she added.

“We are working on what does clean label mean? It’s not what we think it is,” Drake reported. “It’s costing us sales if what they actually want is not on the shelf. We have the opportunity to deliver what consumers still want. We just have to find those things they want — that we have — and be more strategic in how we deliver them.”

Food technology and engineering was a big part of the picture painted for attendees that day.

Diversify processing

Producers were urged to challenge the status quo and to not just add processing, but to diversify it. They were also reminded that the 10 southeastern states had lost eight fluid milk plants in the previous roughly two-year period (2020-22).

During his annual market outlook that year, retired co-op executive Calvin Covington hit the nail on the head with this reminder, saying “that’s done some damage. The major challenge for milk markets in the Southeast is we need more of them,” he said. “A lot of the fluid milk products that are sold in the Southeast are not processed here. If we are going to have a viable dairy industry in the Southeast, we need growing and stable markets for milk produced in the Southeast.”

Covington also differentiated the trends for domestic and export demand, showing that both lagged their respective 5-year-average annual growth in 2022, with domestic demand growing by just 0.5%, while exports grew by 3.5%.

Keeping in mind as exports are expected to top 20% of U.S. milk production on a total solids basis in the next two years and fluid milk sales as a percentage of total milk production have fallen to just under 20%, seismic shifts are already occurring in the heavily fluid milk market of the Southeast.

Transformation brings investors

Geri Berdak, CEO of Dairy Alliance, the Southeast regional checkoff organization, talked about “creating a path forward” with objectives centered on driving milk volume, increasing dairy’s reputation and transforming dairy while building checkoff support.

She said transformation is necessary to “identify high-growth opportunities and stimulate outside investment, technology and innovation.”

The need for processing is big as plants are closing in response to declining fluid milk demand, leaving the the need for more diverse processing assets.

Exports drive innovation

“The biggest thing exports do is to drive value and innovation,” said Patti Smith, a food technology specialist and CEO of DairyAmerica, now wholly-owned by California Dairies Inc. (CDI) milk cooperative. Earlier in her career, Smith held a leadership position with Fonterra and has served at board and officer levels with IDFA and USDEC.

“Exports are a lot more than powder today. Our biggest item is still excess powder,” she said. “But we also export many other products — even UHT (ultra high temperature) and ESL (extended shelf life) fluid milk and cream.”

What Smith sees into the future are “opportunities for the right products and the right product configurations. We have the opportunities to capitalize on them and the technologies to grow them.”

Smith said the biggest benefit of exports to-date is to have a home for milk that grows the dairy industry without relying on core domestic demand for that growth, but that U.S. dairy processing infrastructure is not quite reflective of the new export era.

“We need to make our industry world renown, through a strategic plan that the whole industry will work on together, with digitized supply chains and infrastructure for growth that is reliable and can be consistently demonstrated, and that includes shipping,” said Smith, citing the Innovation Center for U.S. Dairy as the nexus, where the industry’s “strategic plan” for global trade is being built.

Developing ‘new milk beverage platform’

Emanating from the DMI-founded and checkoff-funded Innovation Center for U.S. Dairy is the marketing and promotion arm of new product alliances and the National Dairy Research arm through several universities looking to essentially create a milk beverage platform by drilling into milk’s elements, sifting, sorting and testing different combinations.

Dr. Drake said the new milk beverage platform holds the “keys to the kingdom” as global protein trends were valued at $38.5 million in 2020 and projected to grow. Meanwhile, the nutritional drink markets are growing steadily, with 42% of consumers eating healthy as a higher priority since Covid, and the number of conversations about protein (95% positive) steadily flowing across social media platforms.

Those keys, she said, are membrane technology, ultrafiltration, aseptic packaging and research exploring all of the physical, nutritional and sensory elements of milk at the molecular level to bottle up what consumers say they are looking for, while also gauging through interpretive surveys how this translates to purchases, and then working with processors to build relationships with retailers to get new products into stores.

Drake shared details about the roadmap to play to dairy’s strengths through nutrition, education, capitalizing on calming and immune benefits and using dairy protein functionality to limit added ingredients in beverages to satisfy the clean label trend.

She talked about how elements like fat, protein and lactose at different levels impact milk’s flavor and appearance: “We want to determine the impact of ultrafiltration levels for different concentrations of fat and protein for different sensory or physical experiences.”

She talked about ultrafiltration in conjunction with aseptic packaging for shelf-stable storage using an elaborate diagram of processes.

Bottomline, she said: “The chemistry of these (aseptic) milks is different.”

She described consumer flavor panels where shelf-stable and fresh fluid milk were served cold and compared. The flavor panels evaluated two different storage temperatures for the shelf-stable milk.

The North Carolina researchers worked with their Northeast Dairy Foods Research counterpart at Cornell and with Byrne Dairy, running grad students from North Carolina to Syracuse, New York when batches were available for study. (The Southeast and Northeast as well as Midwest and California Dairy Foods Research Centers all receive funding from checkoff and other sources.)

‘Training consumers’

“Consumer panels still liked the HTST (fresh fluid) milk best overall, but in 14-day and 6-month follow up, we found we can train them,” said Drake, reporting the two best storage temperature options for aseptic milk saw longer-term increase in acceptance.

HTST is the acronym for High Temperature Short Time pasteurization that is basically commodity fresh fluid milk vs. ‘value added’ UHT (ultra high temperature) and ESL (extended shelf life) as well as aseptically-packaged, which is milk processed for longer shelf life and then bottled in a special sterile process and package to last months without refrigeration, but will taste best served cold.

Schools are the gateway

“For 25 years, consumers have not liked aseptic milk,” said Drake, “but we are changing that. Consumers may not like it or want it, yet, but it is great for schools.”

She reported the practical applications to come up with “great tasting school lunch milk that contains no lactose (no natural sugar).” Another practical application is to “determine the impact of storage temperature of 1% aseptic milk on physical and sensory properties.”

This partially checkoff-funded research is also working on “changing the chocolate milk formula to have zero sugar,” she said. “When we think about school milk, the question is how to get the sugar out of it. We want a chocolate milk that tastes great and new government standards on low- or no-added-sugars. Right now, chocolate milk has 8.5 grams of added sugar and 12 grams of natural sugar (lactose).”

In addition to ultrafiltration removing natural sugar, or lactose, they are exploring “non-nutritive” sweeteners like monk fruit and stevia. Additionally, they are looking at “lactose-hydrolized” to boost the flavor profile at much lower levels of sugars or other sweetener.

Whether talking about consumers or children, parents, and schools, the milk beverage platform is tricky “They want to know from a credible source what the immune-boosting elements are in milk, not what we have added. They tell us they want to know the science. That’s new.

“We have a huge and divergent set of innovations to sort through,” said Drake.

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USDA recommends changes to milk pricing formulas and other Milk Market Moos

Posted on July 4, 2024 by Agmoos

By Sherry Bunting, Milk Market Moos column in Farmshine, July 5, 2024 (with updates)

USDA issued a 332-page recommended decision on July 1 for changes to pricing formulas in all 11 Federal Milk Marketing Orders, which was later published in the Federal Register July 15.

The bottom line is a mixed bag of positives, negatives, and questions requiring further study.

USDA AMS professionals did yeoman’s work with the 49 hearing days across five months of proceedings on 21 proposals, yielding 500 exhibits; more than 12,000 pages of transcripts of testimony from farmers, cooperatives, processors and others, along with cross-examination; and over 30 post hearing briefs and correspondence.

Once the draft decision is officially published in the Federal Register in the coming weeks, the 60-day public comment period begins, followed by 60 days of USDA evaluation of the feedback, followed by a final rule, followed by a producer referendum.

According to the FAQ section at the USDA AMS national hearing website, only producers who are pooled in the selected representative month in each Federal Order will be eligible to vote. Each of the 11 Orders votes separately.

If two-thirds of those eligible dairy farmers OR two-thirds of the pooled volume they represent in an Order vote “yes,” then that Order continues, as amended. If neither two-thirds threshold is met, then that Order is terminated. *AMS answered our question on the two-thirds determination that it is determined by the number of eligible (pooled) producers who actually participate in the vote, stating: “If a producer receives a ballot but does not return it, the producer is not included in either the numerator or the denominator of the two-thirds calculation.”

Here’s what’s in the USDA recommended decision package:

1) Milk Composition Factors: USDA recommends updating the milk composition factors to 3.3% true protein, 6.0% other solids, and 9.3% nonfat solids. This would mainly affect Class I in all Orders and the other Class prices in the fat/skim priced Orders.

2) Surveyed Commodity Products: The recommendation here is to remove the 500-pound barrel cheese prices from the Dairy Product Mandatory Reporting Program survey and rely solely on the 40-pound block cheddar cheese price to determine the monthly average cheese price used in the Class III and protein formulas. National Milk Producers Federation (NMPF) proposed this and International Dairy Foods Association (IDFA) opposed it. American Farm Bureau Federation (AFBF) had proposed adding unsalted butter and 640-lb block cheddar to the survey, and California Dairy Campaign had proposed adding bulk mozzarella. Neither of these proposals were included in USDA’s recommended decision.

AFBF chief economist Roger Cryan discussed this recently on Farm Bureau Newsline, where he also talked about USDA decision not to include AFBF’s proposal to raise the Class II differential.

3) Class III and Class IV Formula Factors: USDA chose to recommend make allowance increases that fall in between the lower increase proposed by NMPF and the higher increase proposed by IDFA and Wisconsin Cheesemakers. The USDA recommendation is to raise these manufacturing allowances from current levels to these new levels: Cheese: $0.2504; Butter: $0.2257; NFDM: $0.2268; and Dry Whey: $0.2653. The recommended decision also proposes updating the butterfat recovery factor to 91%.

By our calculations, the proposed make allowance increase would equate to roughly an additional 80 cents per hundredweight deduction from milk checks embedded in the pricing formulas. Current make allowances total up to about $2.75 to $3.60 per hundredweight, depending on product mix. New make allowances would total up to about $3.25 to $4.50 per hundredweight, depending on product mix.

AFBF economist Danny Munch was interviewed by Brownfield Ag on July 2, noting the increase is 5 to 7 cents per pound. “When we loop that into a per-hundredweight value, that means farmers will be seeing 75 cents to 87 cents less per hundredweight on their milk checks because of the increased make allowance.” He says the data used for the make allowances was based on voluntary cost of production surveys.

Farm Bureau president Zippy Duvall did not mince words: “We strongly believe make allowances should not be changed without a mandatory, audited survey of processors’ costs. Our dairy farmers deserve fairness in their milk checks and transparency in the formula, but the milk marketing order system can’t deliver that unless make allowances are based on accurate and unbiased data,” he said in an AFBF news release.

American Dairy Coalition CEO Laurie Fischer also weighed in: “We are disappointed that USDA has proposed higher make allowance credits for processors, which are — in effect — deductions from farmer milk checks that are embedded within the pricing formulas. The industry does not yet have mandatory, audited cost surveys, and there is no connection between increased processor credits and a transparent, adequate price paid to farmers,” she said in an ADC news release, adding that these two elements have been key policy priorities for ADC since January of 2022.

4) Class I differentials: USDA recommends updating Class I differential values to reflect the increased cost of servicing the Class I market. The base differential for all counties stays at $1.60, and the county-specific Class I differentials are specified in the decision at levels higher than they are currently, but by less than the increases that had been proposed by NMPF.

5) Base Class I Skim Milk Price: USDA recommends going back to the higher-of the advanced Class III or Class IV skim milk prices to set the Class I mover each month. However, the Department did not go with Farm Bureau’s request to do this on an emergency expedited basis.

And, here’s where it gets tricky, the higher-of method would only apply to fresh fluid milk, while adopting a rolling monthly adjuster that incorporates the average-of for milk that is used to make extended shelf life (ESL) fluid products, including shelf-stable milk.

This means ESL milk would be priced differently from conventional fresh fluid milk within the same Class I category. A simple averaging method would be used as part of this special ESL adjuster, which would incorporate a 24-month rolling average (with a 12-month lag) of the difference between the higher-of minus the average-of, which is added to the current month simple average-of, and then the current month higher-of is subtracted from that sum. This adjuster could be either a positive or negative number.

In fact, we’ve learned that this ESL adjuster, using months 13 through 36 counting backward from the implementation date, would allow milk for ESL products to recoup, over time, some of the very large prior losses experienced by all dairy farmers during the average-of method that has been in place since May 2019. Because a simple average is used for the adjuster calculation, without the 74 cents, more would be recouped than the actual loss difference experienced under the years of the average plus 74 cents method. On the other hand, the rolling adjuster look back will include months in which a smaller make allowance was in effect than could be the case in the future if USDA’s make allowance recommendation becomes final.

Meanwhile, producers of milk bottled as ‘regular’ fresh fluid milk would start right out of the implementation gate at the higher-of and recoup zero prior loss endured under the current form of average-of, and be subjected to the higher make allowance, which is built into the advance pricing factors. (More on this feature of the USDA recommended decision in a future article.)

In its ‘notice to trade,’ USDA states that the ESL adjuster was developed to “provide for better price equity for ESL products whose marketing characteristics are distinct from other Class I products.”

Meanwhile, in his July 3rd CEO’s Corner, NMPF’s Gregg Doud appears to embrace what is essentially a fifth milk class given the different pricing methods proposed in the recommended decision for Class I — depending on shelf-life classification.

Doud writes: “Recognizing the need to restore orderly milk marketing, USDA decided to go back to the higher-of, with an accommodation for extended shelf-life milk, thus granting NMPF’s request for the vast majority of U.S. fluid milk. USDA’s solution is, frankly, as innovative as it is fair – a classic case of two sides not getting all that everyone wanted, but everyone getting what they most needed.”

Splitting the baby was not part of any hearing proposal that we could find; apparently processors made their case with USDA as to needing the average-of method (with calculated adjuster) to sell ESL milk products deemed the new milk beverage platform.

During the national hearing in Carmel, Indiana, representatives from Nestle, a major maker of ESL fluid milk products, said their sales increased once the average-of method was implemented in May 2019 through legislative language in the 2018 farm bill. They testified that they could manage risk when providing 9 to 12 month future pricing on shelf-stable fluid products to foodservice and convenience stores. They lamented that losing the average-of would hurt their sales.

Representatives for fairlife testified that forward pricing of their ESL products was critical to their ability to grow sales and that losing the average-of would impact future plans, including the size of the new plant being planned for New York State and other expansions elsewhere in the future.

However, since this bifurcation of Class I was not a proposal subject to vetting, no one had the opportunity to present evidence on future impacts.

Public comments on the recommended proposals will be accepted for 60 calendar days after the decision is published in the Federal Register. Comments should be submitted at the Federal eRulemaking portal: http://www.regulations.gov or the Office of the Hearing Clerk, U.S. Department of Agriculture, 1400 Independence Ave., SW, Stop 9203, Room 1031, Washington, DC 20250-9203; Fax: (844) 325-6940.

OTHER MOOS — July 3, 2024

Milk futures swap trends: Cl. IV up, III down

Class III milk futures moved lower this week especially on August and Sept. 2024 contracts; while Class IV milk futures were higher on 2024 contracts, steady to firm for 2025. On Tues., July 2, Class III milk futures for the next 12 months averaged $19.28, down 24 cents from the previous Wednesday. The 12-month lass IV milk futures average was $21.19, up 14 cents. This put the spread between Class IV over III at nearly $2.00 per cwt.

Block cheese, whey higher

Pre-holiday trade was firm to higher with little volume moved on most products. But nonfat dry milk lost ground, and the 500-lb barrel cheese trade was active at lower prices.
The 40-lb block Cheddar price was pegged at $1.90/lb on Tues., July 2, up 2 cents from the previous Wednesday, with just 2 loads trading the first 2 days. The 500-lb barrel cheese market lost 2 cents, pegged at $1.88/lb Tuesday with 12 loads trading the first two days. (Update gained it back July 3 at $1.9025/lb with 2 loads trading). Dry whey gained a half-penny on the week at 49 cents/lb; one load traded.

Butter higher, powder weak

The butter market saw no trades the first two days this week. By Tues., July 2, the daily CME spot price was pegged nearly a nickel higher at $3.1375/lb. Grade A nonfat dry milk lost a penny and a half at $1.17/lb Tuesday with 4 loads changing hands. (Update, NFDM up July 3 at $1.18/lb, 2 loads traded)

May All-Milk $22.00, DMC margin $10.52

USDA announced the All-Milk price for May at $22.00, up $1.50 from April and $2.90 higher than a year ago. The national average fat test was 4.17, up 0.02 from the previous month and up 0.11 from a year ago. The Pennsylvania All-Milk price for May, at $22.50, was just 70 cents higher than for April, and fat test fell by 0.10 from April to May.

USDA announced the May Dairy Margin Coverage (DMC) margin at $10.52/cwt, up 92 cents from April and up a whopping $5.69 per cwt from the May margin a year ago. This is the third consecutive month in which no DMC margin payments were triggered as the margin remains above the highest coverage level of $9.50/cwt. The $1.50/cwt gain in the national average All-Milk price in May outpaced the 58 cents/cwt increase in feed cost.

H5N1 detections fall to 57 in just 7 states

As of July 2, 2024, the confirmed cases of H5N1 in dairy cows decreased to 57 herds in now just 7 states as South Dakota moved past the 30-day window and off the active map. Colorado has the most detections at 23 in the past 30 days, 27 cumulatively since April 25. This has created some questions as it represents 20 to 25% of the 110 herds in the 13th largest milk-producing state. Colorado is followed by Iowa (12), Idaho (9), Minnesota (6), Texas (5), while Michigan’s previously high numbers over 25 have dropped to one, and Wyoming still has just one. Michigan and Wyoming will be past their 30 days on July 7 and 12, respectively, if no new detections are confirmed.

Meeting on case involving ultrasound of livestock draws 300, mainly Amish

Posted on June 30, 2024 by Agmoos

On the evening of June 13th, 300 people, mainly Amish dairy farmers and business owners with horses, came to a farm near Quarryville, Pennsylvania to hear from and show support for Rusty Herr and Ethan Wentworth (far front right and second from right). Their attorney Robert Barnes (standing), spoke about the case and their quest to get clarity on the law. Also speaking briefly (standing left) was Pennsylvania State Representative Wendy Fink of York County. Photo by Sherry Bunting

By Sherry Bunting

QUARRYVILLE, Pa. — It was a clear, balmy evening that farmers could have spent in field work, but over 300 people arrived by buggy, van, and on foot to hear from two men and their legal team at 7 p.m. Thursday, June 13 on an Amish dairy farm in southern Lancaster County, Pennsylvania. (Click here to read author’s analysis/opinion)

The meeting came just one month after Rusty Herr and Ethan Wentworth were released from prison, having served the 30 days on contempt charges for failing to provide names, addresses, and records as part of a 2021 subpoena from the Bureau of Professional and Occupational Affairs (BPOA) on behalf of the State Veterinary Board.

The 2021 subpoena was set in motion by a 2020 petition from the Pennsylvania Veterinary Medical Association targeting Rusty and Ethan for continuing to perform veterinary practice without a license by ultrasounding livestock.

The majority of attendees were from the Amish community, half of them dairy farmers, and half business owners, tradesmen, who have horses. A sprinkling of non-Amish farmers were also in attendance.

One could hear a pin drop while Rusty and Ethan talked separately of their time in prison, highlighting what the prayers and support of family, friends, colleagues, and customers have meant to them and crediting their team of employees for stepping up in their absence and their wives and families for all they have done and endured.

They talked of how their faith in God grew stronger over those 30 days, and of their steadfast resolve to continue serving this community.

Attorney Robert Barnes of Barnes Law LLP talked about two of the exceptions in Section 32 of the Vet Practice Act of 1974, as amended in 1986: “This Act does not apply to (32. 4) Any person or his or her regular employee or agent while practicing veterinary medicine on his or her own animals… and (32. 7) Any person performing normal husbandry practices on bovine, porcine, caprine, ovine or equine animals or avis.”

Neither ‘agent’ nor ‘normal husbandry practices’ are defined in the list of terms in the Act’s introduction.

According to Webster’s the definition of ‘husbandry’ is “the care, cultivation, and breeding of crops and animals,” and the definition of ‘agent’ is “a person who acts on behalf of another person or group.”

‘Agent’ is actually a legal term used to describe “a person that has been entrusted with important powers or responsibilities that are to be carried out on behalf of another person.”

A legal basis for the term ‘normal husbandry’ is traditionally understood as a combination of the producer’s self-interest (economic sustainability) and duties of humane treatment for the animals on which we depend. The two go hand in hand.

“There is a war on the small farmers around the world. The Amish are caught in the middle. They bring essential value and high-quality food from a farming community that seeks to protect a way of life,” said Barnes, who also represents Amos Miller in the raw milk case brought by the Pennsylvania Department of Agriculture.

Barnes called the April 2024 arrests of Rusty and Ethan an “abuse of power” treating civil contempt as though criminal through incarceration.

He called this an example of using regulatory process to bolster “new and novel interpretations of the law.” Other examples he gave involved access to water, takings of food, and animal welfare interpretations that, according to Barnes, use the court system to create new definitions for ‘normal farming.’

“They pick people who are in an isolated position, where it is hard to afford a legal defense,” he said.

Barnes also spoke of power and control, referring to ‘Big Food’ and ‘Big Pharma.’ He said “corporate interests” want to define normal farming and husbandry as it applies to food distribution and animal care in such a way that small independent farms find it difficult to comply or economically unfeasible to survive in the future.

“People are having more chronic diseases, dying earlier, and living less happy lives, but this (Amish) community is not relying on (the world) for your cultural values. This community is a beacon, and so is your independent food system,” he declared.

One attendee spoke up to say: “We need both. We need our veterinarians, and we need NoBull (breeding management services).”

In light of a shortage of vets and the much smaller number of animals on farms like his, this man wondered how a middle ground can be reached by working together.

Farmers who spoke privately after the meeting echoed the same thought to this reporter. When asked what their vets think of this, they said they can’t even discuss it with their veterinarians for fear of losing their services altogether.

They said they have their vets come regularly for herd check and will even list a cow that may have already been checked timely when the breeder was there.

“Why would I call the vet to check one animal (in between herd checks), when my breeder is already here? Would they even come (timely) for one animal?” a farmer noted, shaking his head.

To protect the farms in this equation, Barnes said clarity in the law is required.

“We want the court to rule on the law… to establish the farmer’s right to do these practices and do them through an employee or ‘agent’, as the law states,” said Barnes. “This is the start of a long process. If they (NoBull) are shut down, who will be next? It’s about the impact this can have to small farmers across the country… and on this community. This is a consequential case.”

Pennsylvania State Representative Wendy Fink (R-94^th), covering part of York County, also attended the June 13 meeting. She has been closely following the case and spoke briefly about it, citing the abundance of phone calls that have poured into her office and other legislators’ offices. She said she hopes a similar meeting will be held soon in York County and one in the future with additional State lawmakers.

“Your phone calls are important. Keep doing what you’re doing. We support these two gentlemen. Most people would cower… but these two are putting themselves out there. They’re standing up for you. This starts at our local government, so keep the pressure on to make sure that they are abiding by the laws as they’ve been written,” she said.

-30-

Ag Moos

Author Archives: Agmoos

About Agmoos

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About Agmoos

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