Digest Highlights

Reminder: MFP payment application deadline is Feb. 14

Dairy farmers and producers of many other agricultural commodities are reminded that Feb. 14 is the deadline to apply for payments under the Market Facilitation Program (MFP). MFP provides financial assistance to producers negatively impacted by trade wars and retaliatory tariffs. The original deadline of Jan. 15 was extended due to the lengthy partial government shutdown.

Natzke dave
Dave Natzke
Editor / Progressive Dairy

Announced in two installments, dairy producers are eligible to receive 12 cents per hundredweight (cwt) in MFP payments. The payments are based on annual milk production history filed with USDA’s Farm Service Agency (FSA).

Producers need only sign up for MFP payments once. However, those who failed to enroll prior to the USDA shutdown now have until Feb. 14 to apply at FSA offices.

Read: USDA announces second round of trade mitigation payments and Need cash? Get to FSA office for MFP payments.

Deadlines for other programs administered through FSA are listed on the FSA website.

Advertisement

USDEC to receive $5.3 million under Trade Mitigation Program

The U.S. Dairy Export Council (USDEC) will receive $5.3 million from a USDA program designed to help organizations develop new export markets to offset the negative impact of ongoing trade wars and retaliatory tariffs.

USDEC is one of 57 organizations receiving a total of $200 million under the Agricultural Trade Promotion (ATP) program. The ATP is one of three USDA programs created last fall to mitigate the effects of trade retaliation against U.S. farmers and exporters. The three-pronged approach included:

  • direct payments to producers under MFP. In total, dairy farmers will receive about $255 million, or 12 cents per cwt on annual milk production history established at the Farm Service Agency. (See above for sign-up deadline reminder.)

  • government purchases of agricultural commodities for feeding and nutrition programs under the Food Purchase and Distribution Program. USDA committed to purchasing about $84.9 million worth of dairy products in fiscal year 2019.

  • ATP money to assist in the development of new domestic and export markets. USDA’s Foreign Agricultural Service (FAS) accepted ATP applications between Sept. 4-Nov. 2. The applications – totaling nearly $600 million – came from U.S. trade associations, cooperatives and other industry-affiliated organizations.

Click here to find a list of all ATP recipients.

Dairy launching ‘protein’ initiative

Dairy organizations will work on a multiyear Dairy Protein Messaging Initiative (DPMI) in an effort to communicate the benefits of milk and whey proteins to consumers. Information about the initiative was shared during the 2019 International Dairy Foods Association (IDFA) Dairy Forum, held in January, in Orlando, Florida.

The pre-competitive campaign is intended to communicate the positive attributes of dairy-derived proteins and ingredients, providing consumers with research- and science-based facts to enable them to make “protein of choice” decisions related to their health and well-being.

“The DPMI will provide fact-based information related to dairy ingredients and dairy-derived proteins and will dispel myths, fallacies and alternate facts that are being professed by some, not all, marketers of alternate/plant-based proteins,” according to Blake Anderson, president and CEO of the American Dairy Products Institute (ADPI).

Support of and for the DPMI is open to all stakeholders of the dairy industry.

Federal Reserve holds line on interest rates

The Federal Reserve board left interest rates unchanged during its meeting on Jan. 30. The board had raised the interest rate in December and suggested additional increases could be implemented in 2019.

Information received since the board’s Federal Open Market Committee met in December indicates the labor market has continued to strengthen, and economic activity has been rising at a solid rate. Household spending has continued to grow strongly, while growth of business fixed investment has moderated from its rapid pace earlier last year.

Read: It’s time to stress test for interest rate risk.

January Class IV price hits 16-month high

Federal Milk Marketing Order Class III and Class IV milk prices moved slightly higher to start the new year. The January 2019 Class III milk price rose to $13.96 per cwt, 18 cents more than December 2018, but still 4 cents less than January 2018.

The January Class IV price is $15.48 per cwt, up 39 cents from December and $2.35 more than January 2018. It’s the highest Class IV price since September 2017.

November cull cow prices hit eight-year low

Although prices have improved of late, the USDA’s November Ag Prices report showed U.S. cull cow prices ended last year at eight-year lows.

November 2018 cull cow prices (beef and dairy combined) averaged $52.70 per cwt, down more than $5 from October and $10.70 per cwt less than November 2017.

The November 2018 average is the lowest since November 2010, and the 2018 annual average is headed toward the lowest level since 2010.

December’s U.S. average cull cow price will be announced Feb. 20.

November dairy products report released

Delayed by the government shutdown, USDA is catching up on dairy-related production estimates. A summary of November 2018 dairy product production compared to the previous year and month follows:

  • Total cheese output (excluding cottage cheese) was 1.1 billion pounds, 1 percent more than November 2017 but 4.3 percent less than October 2018. Through the first 11 months of 2018, total cheese production was estimated at 11.8 billion pounds, up 2.5 percent from January-November 2017.

  • Italian-type cheese production totaled 464 million pounds, 1.6 percent above November 2017 but 2.2 percent less than October 2018.

  • American-type cheese production totaled 423 million pounds, 2.2 percent above November 2017 but 3.5 percent below October 2018.

  • Butter production was 146 million pounds, 2.7 percent below November 2017 but 1.5 percent above October 2018. Through the first 11 months of 2018, butter production has totaled 1.7 billion pounds.

Compared to the same month a year earlier:

  • Nonfat dry milk production was 130 million pounds, down 8 percent.
  • Skim milk powders production was 30.4 million pounds, down 27 percent.
  • Dry whey production was 75 million pounds, down 9 percent.
  • Whey protein concentrate production was 40 million pounds, down 3 percent.

A revised schedule of other USDA reports is available here. 

Global Dairy Trade index takes big jump

The index of Global Dairy Trade (GDT) dairy product prices posted a fifth consecutive increase during the auction held Feb. 6. The 6.7 percent jump followed a 4.2 percent increase on Jan. 15.

Prices for all major product categories were higher:

  • Skim milk powder was up 3.9 percent to $2,534 per metric ton (MT).
  • Butter was up 4.2 percent to $4,445 per MT.
  • Whole milk powder was up 8.4 percent to $3,027 per MT.
  • Cheddar cheese was up 1.4 percent to $3,565 per MT.

The next GDT auction is Feb. 19, 2019.  end mark

Dave Natzke