Digest Highlights

April 2022 Class I base price nears record high

The Federal Milk Marketing Order (FMMO) advanced Class I base price moved near the all-time record high in April.

Natzke dave
Editor / Progressive Dairy

At $24.38 per hundredweight (cwt), the April price is up $1.50 from March 2022 and $8.87 more than April 2021. It’s just 9 cents below the record high of $24.47 per cwt in May 2014.

The four-month average 2022 Class I base is $22.15 per cwt, up from the January-April average of $15.35 cwt in 2021, and is second only to the January-April 2014 average of $22.70 per cwt.

A Class I differential for each order's principle pricing point is added to the base price to determine the Class I price. With those additions, April 2022 Class I prices will average $27.20 per cwt, ranging from a high of $29.78 per cwt in the Florida FMMO #6 to a low of $26.18 per cwt in the Upper Midwest FMMO #30.

The Class I mover “average-of” formula again took a small bite out of the Class I base price paid to producers.

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The difference between the advanced Class III skim milk pricing factor ($11.97 per cwt) and the advanced Class IV skim milk pricing factor ($14.51 per cwt) declined slightly from March to $2.54 per cwt.

Based on Progressive Dairy calculations, the Class I mover calculated under the “higher-of” formula would have resulted in a Class I base price of $24.89 per cwt, 51 cents more than the price determined using the “average-of plus 74 cents” formula.

Vitaliano: Milk production constraints remain

That combination of lower supply and increased demand is generating higher U.S. average all-milk prices, notes National Milk Producers Federation’s Peter Vitaliano, summarizing markets in the March 2022 Dairy Management Inc./National Milk Producers Federation Dairy Market Report.

Looking ahead, Vitaliano said late February dairy and grain futures indicated that feed costs will tend to track milk prices over the next several months, keeping the Dairy Margin Coverage (DMC) margin from rising much above its January level of $11.54 per cwt. The current outlook also indicates that the February margin – to be announced March 31 – will drop considerably from a month before, as the milk price took a pause before rising again and feed prices show the full force of the grain markets’ reactions to the potential drop in Ukrainian production.

High feed prices, scarcities in obtaining replacement cows, labor, machinery and construction materials will likely keep milk production very constrained well into the year, he said.

For more information on commercial use, dairy trade, milk production, product inventories, prices and margins, click here.

National Dairy Board nominees sought

The USDA’s Agricultural Marketing Service (AMS) is seeking nominees for the National Dairy Promotion and Research Board (NDB). The deadline for nominations is April 25.

From the nominees, 12 individuals will be appointed to serve three-year terms, from Nov. 1, 2022, through Oct. 31, 2025.

Nominees must be dairy producers in the region for which they are nominated.

Nominees are being sought to fill:

  • Five seats for Region 2 (California and Hawaii)
  • One seat for Region 3 (Arizona, Colorado, Montana, Nevada, Utah and Wyoming)
  • One seat for Region 4 (Arkansas, Kansas, New Mexico, Oklahoma and Texas)
  • One seat for Region 6 (Wisconsin)
  • One seat for Region 9 (Indiana, Michigan, Ohio and West Virginia)
  • One seat for Region 10 (Alabama, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, Puerto Rico, South Carolina, Tennessee and Virginia)
  • One seat for Region 11 (Delaware, Maryland, New Jersey and Pennsylvania)
  • One seat for Region 12 (Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont)

The 37-member NDB consists of 36 dairy producers from 12 regions and one dairy importer. Nomination forms are available on the AMS National Dairy Promotion and Research Board webpage.

DFA holds annual meeting

Editor’s note: The following article was generated from press releases.

Dairy Farmers of America (DFA), the nation’s largest dairy cooperative, held its annual meeting, March 23, in Kansas City, Missouri.

“COVID-19 variants and ongoing supply chain challenges have made 2021 a difficult year for many, but our family farm-owners and employees have continued to persevere and stay focused on keeping people across the United States and the world nourished with milk and other dairy products,” said Rick Smith, DFA president and chief executive officer.

Financial year in review

In 2021, DFA continued to integrate the plant assets and regional brands acquired out of the Dean bankruptcy, while also focusing on expanding global customers.

DFA officials reported net income of $199 million for 2021, up $28 million (16.4%) compared to 2020. Net sales for 2021 totaled $19.3 billion, up $1.5 billion (8.1%) from 2020.

Contributing to higher income and sales were a full year of operations of former Dean Foods’ facilities compared to a partial year in 2020, along with a higher U.S. all-milk price. The average milk price paid to DFA members was $18.37 per cwt in 2021 compared to $17.79 per cwt in 2020.

In 2021, DFA directed the marketing of 65.5 billion pounds of milk for both members and others through the cooperative’s consolidated businesses, which represent approximately 29% of the total U.S. milk production.

Cash distributed to members in 2021 totaled $71 million. Of the cash distributed to members in 2021, $47 million was in capital retirements and $24 million represented the cash portion of the allocated patronage dividends.

DFA continued to support local communities in 2021 through its Farmers Feeding Families Fund, which helps raise money and get dairy products to food banks across the country. This last year, 17 of DFA’s regional milk brands stepped up to help fill a need at food pantries across the country with the donation of more than 2 million shelf-stable “Giving Cow” milks.

Members of distinction

Due to virtual meetings in previous years, dairy farm families in each of DFA’s seven regions were recognized as 2020 and 2021 members of distinction. They included:

  • Central area: (2020) Brick family, Brickstead Dairy – Greenleaf, Wisconsin, and (2021) Haase family, DaBru Dairy – Parker, South Dakota

  • Mideast area: (2020) Oesch family, Swisslane Farms – Alto, Michigan, and (2021) Haines family, Haines Farms –Stockport, Ohio

  • Mountain area: (2020) Roth family, Si-Ellen Farms – Jerome, Idaho, and (2021) Koolstra family, Daisy Lane Dairy – Cope, Colorado

  • Northeast area: (2020) Garber family, Rock Solid Dairy LLC – Shippensburg, Pennsylvania, and (2021) Smiley family, Russell Smiley Dairy Farm – Middletown, New York

  • Southeast area (2020) Crawley family, Crawley’s Valley View Farms – Gravette, Arkansas, and (2021) Chapman family, Chapman Jersey Farm LLC – Taylorsville, North Carolina

  • Southwest area (2020) Schroeder family, Lawrence Schroeder Dairy – Windthorst, Texas, and (2021) Collier family, T&K Dairy – Snyder, Texas

  • Western area (2020) De Snayer family, De Snayer Dairy — Lodi, California, and (2021) Carvalho family, Carvalho Dairy Farms — Crows Landing, California.

Finally, the cooperative named 53 recipients of DFA Cares Foundation Scholarships totaling $74,800. Scholarship selection criteria included a commitment and passion for a career in the dairy industry; extracurricular activities, awards and work experience; and academic achievement.

DFA has more than 11,500 family farm-owners and manufactures a variety of dairy products, including fluid milk, cheese, butter, ice cream, dairy ingredients and more.  end mark

Dave Natzke