Here is a brief look at the news affecting dairy producers during the second week of November 2023.

Natzke dave
Dave Natzke
Editor / Progressive Dairy

Digest highlights

House panels says dairy producers need H-2A program

The House Ag Committee’s Agricultural Labor Working Group (ALWG) released an interim report summarizing labor issues facing producers and processors. Co-chaired by U.S. Reps. Rick Crawford (R-Arkansas) and Don Davis (D-North Carolina), the House panel will use the report as a basis for recommendations to reform the H-2A program.

In a chapter on dairy, the report estimates roughly 40% of all U.S. dairy farms have non-family member employees, and about 70% of those workers are immigrant employees. That percentage is expected to increase as dairy operations continue to grow and fewer family members remain on the farm.

Despite typically paying competitive wages and providing employee benefits, dairy farms are in a decadeslong labor crisis, remaining understaffed and having difficulty finding domestic workers. Unlike many other agricultural sectors, dairy operations cannot use the guest worker H-2A program. While it would not address the domestic labor crisis, allowing dairy producers to use the H-2A program would provide them with access to an employee pool to supplement their workforce, the report notes.

Advertisement

The report can be downloaded from the House Committee on Agriculture website.

USDA ‘baseline’ tables preview dairy markets through 2033

In preparation for next year’s administration budget planning, the USDA released preliminary 10-year agricultural projections for major U.S. crops and livestock products, including dairy.

Commonly referred to as the “USDA Baseline,” the report reflects USDA’s assessment of how markets would evolve under current conditions, existing laws and normal weather patterns. Thus, the projections do not capture potential market volatility, instead serving as a neutral benchmark for measuring the effects of proposed legislation or external developments that could impact agricultural markets.

For dairy, the report projects a gradual growth in the U.S. dairy herd beginning in 2026, reaching 9.555 million head by 2033. The annual increase in milk output per cow averages about 1%, reaching 26,540 pounds in 2033. With the increase in both cow numbers and milk per cow, total U.S. milk production is projected to reach 253.6 billion pounds in 2033.

After averaging more than $25.30 per hundredweight (cwt) in 2022, all-milk prices are projected to average about $22.25 per cwt during 2023-33, with a high of $24.80 per cwt in 2033.

Calculated in October 2023, the preliminary report will be followed in February 2024 with updates that include a full discussion of commodity supply and use projections and outlooks for farm income and global commodity trade.

Find tables for dairy and other major ag commodities at the USDA website.

Ag producer sentiment improves a little

Short- and long-term economic outlooks of more agricultural producers brightened slightly in October, according to the latest Purdue University/CME Group Ag Economy Barometer.

"Farmers in this month's survey were slightly less concerned about the risk of lower prices for crops and livestock and felt somewhat better about their farms' financial situation than a month earlier," said James Mintert, the barometer's principal investigator and director of Purdue University's Center for Commercial Agriculture.

However, despite the perception that financial conditions were stronger, nearly eight out of 10 (78%) respondents said it was a bad time to make large investments in their farm operation, with about half citing higher interest rates.

The Ag Economy Barometer provides a monthly snapshot of farmer sentiment regarding the state of the agricultural economy. The survey collects responses from 400 producers whose annual market value of production is equal to or exceeds $500,000. Minimum targets by enterprise are as follows: 53% corn/soybeans, 14% wheat, 3% cotton, 19% beef cattle, 5% dairy and 6% hogs. Latest survey results, released Nov. 7, reflect ag producer outlooks as of Oct. 16-20.

GDT index dips

After posting four consecutive increases, the Global Dairy Trade (GDT) price index dipped in an auction held Nov. 7. Compared to the previous auction, prices were higher for anhydrous milkfat, cheddar cheese, lactose and skim milk powder but lower for butter and whole milk powder.

The GDT platform offers dairy products from several global companies: Fonterra (New Zealand), Darigold, Valley Milk and Dairy America (U.S.), Amul (India), Arla (Denmark), Arla Foods Ingredients (Denmark) and Polish Dairy (Poland). The next GDT auction is Nov. 21.

In case you missed it

  • In early November, the USDA began mailing ballots for the Farm Service Agency (FSA) county and urban county committee elections to all eligible agricultural producers and private landowners across the country. Ballots must be returned to local FSA county offices or postmarked by Dec. 4, 2023, to be counted.     

Coming up

  • The 2023 joint annual meeting of the National Dairy Promotion and Research Board (NDB), National Milk Producers Federation NMPF) and United Dairy Industry Association (UDIA) will be held Nov. 12-15, in Orlando, Florida. Watch for coverage by Progressive Dairy.
  • October 2023 Federal Milk Marketing Order (FMMO) pooling estimates, uniform prices and producer price differentials will be released on Nov. 11-14 and summarized by Progressive Dairy next week.
  • Recessed since Oct. 11, the USDA’s national public hearing to consider FMMO proposals to amend uniform pricing formulas will convene on Nov. 27, 1 p.m. (Eastern time), in Carmel, Indiana. If the hearing is not completed on Dec. 1, the hearing will reconvene on Dec. 4, at Zionsville, Indiana. If the hearing is not completed on Dec. 8, it will recess again and reconvene at a later date. Copies of the notice to reconvene, guidelines for how to participate and exhibits entered during the hearing are available on the National Federal Milk Marketing Order Pricing Formula Hearing webpage.