In the news this week:

Natzke dave
Editor / Progressive Dairy
Lee karen
Managing Editor / Progressive Dairy

Class I base price dips for November

After hitting a two-year high, the Federal Milk Marketing Order (FMMO) advanced Class I base price dips slightly in November. At $22.53 per hundredweight (cwt), the November 2024 advanced Class I base price is down 64 cents from October 2024 but still $2.78 more than November 2023.

Through the first 11 months of 2024, the Class I base price now averages $20.25 per cwt, about $1.10 more than the January-November 2023 average of $19.15 per cwt.

Class I zone differentials are added to the base price at principal pricing points to determine the actual Class I price in each FMMO. With those additions, November Class I prices will average approximately $25.35 per cwt across all FMMOs, ranging from a high of $27.93 per cwt in the Florida FMMO to a low of $24.33 per cwt in the Upper Midwest FMMO.

The spread in the monthly advanced Class III skim milk pricing factor ($12.66 per cwt) and advanced Class IV skim milk pricing factor ($10.47 per cwt) widened for November to $2.19 per cwt. That means that the current Class I mover formula negatively impacted Class I prices.

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Based on Progressive Dairy calculations, using the Class I mover calculated under the “higher-of” formula would have resulted in a Class I base price about 34 cents more than the actual price determined using the “average-of plus 74 cents” formula.

A change in the formula back to higher-of calculations is included in the FMMO modernization proposal.

FARM Program announces 2024 Excellence Awards winners

Farmer leaders in stewardship, sustainability and workforce best practices, along with a top FARM Program evaluator, were recognized at the fourth annual FARM Excellence Awards presentation held at National Milk Producers Federation’s annual meeting in Phoenix, Arizona.

The awards, given by the FARM Program, recognized three farms and one evaluator who go above and beyond industry standards through their commitment to innovation and continuous improvement.

The 2024 FARM Excellence Award recipients are:

  • Animal Care & Antibiotic Stewardship – Carlson Dairy LLP, Pennock, Minnesota, and a member of First District Association
  • Environmental Stewardship – Double S Dairy, Markesan, Wisconsin, and a patron of Saputo Cheese USA Inc.
  • Workforce Development – Oakridge Dairy, Ellington, Connecticut, and a member of Dairy Farmers of America
  • Evaluator of the Year – Nicole Frank, Litchfield, Minnesota, is a FARM Program evaluator for First District Association.

Vitaliano: Fluid milk consumption grows amid milk production decline

Highlights for the June-August period include continuing annual growth in total fluid milk consumption and the opposite for production of raw milk, according to National Milk Producers Federation’s (NMPF) Peter Vitaliano. Summarizing dairy markets in the October 2024 Dairy Management Inc./NMPF Dairy Market Report, he said these are both unusual when compared with decades-long tends.

Yogurt, butter, other than American-type cheese, and even fluid milk and total cheese all effectively showed annual per capita consumption growth during the period.

The U.S. dairy industry exported more than 17% of U.S. milk solids production during three consecutive months for the first time since the fourth quarter of 2022.

The monthly National Dairy Product Sales report prices of all four basic dairy products reached their highest levels for 2024 to date in September, while the August Dairy Margin Coverage margin was the highest since margin protection became the basic federal dairy safety net program in 2015, with continued high prices and margins expected.

For more information on commercial use, dairy trade, milk production, product inventories, prices and margins, view the October 2024 Dairy Market Report.

USDA seeks nominations for statistics committee

The USDA is seeking nominations to the Advisory Committee on Agriculture Statistics. Members of this committee advise the secretary of agriculture on the scope, timing and content of periodic agricultural censuses, as well as surveys of agriculture and other related industries. The committee also makes recommendations on the content of agricultural reports and represents the views and data needs of suppliers and users of agricultural statistics.

The committee, appointed by the secretary of agriculture, consists of 22 members representing a broad range of disciplines and interests including, but not limited to, agricultural producers, national farm organizations, agricultural economists, rural sociologists, farm policy analysts, educators, state agricultural organizations, and agriculture-related business and marketing experts. Members serve a staggered two-year term and can serve up to three terms for a total of six consecutive years. Nominations are currently being sought for 22 open committee seats.

To submit a nomination, complete an AD-755 form and submit it by Nov. 25.

For more details, see the Federal Register notice.

NMPF elects new board members

At the NMPF annual meeting held in Phoenix, Oct. 21-23, the board of directors approved the organization’s policy positions and elected new members. New board members approved by NMPF delegates include:

  • Darrin Monteiro, California Dairies Inc.
  • Dan Kullot, Dairy Farmers of America
  • Kimberly Parks, Dairy Farmers of America
  • Deric Lindstrom, Ellsworth Cooperative Creamery
  • Joel Eigenbrood, Foremost Farms
  • Jon Cowell, Maola (formerly Maryland & Virginia Milk Producers Cooperative Association)

Cowell and Eigenbrood also were elected to NMPF’s executive committee. The board also elected Craig Caballero of United Dairymen of Arizona to serve as its secretary. In addition, Jacob Larson of Southeast Milk Inc. was elected chairman of the Small Cooperative Caucus and, in turn, to NMPF’s executive committee.

The members awarded Honorary Directors for Life recognition to John Wilson and Kent Herman, both of Dairy Farmers of America; and Jay Bryant of Maola, NMPF’s outgoing secretary.

Study shows regulation of California dairy sector harmful to economy, climate priorities

The California Cattle Council released a new report, “Economic Analysis of California Dairy Consolidation, Attrition, and Policy Leakage.” The data-driven economic analysis, conducted by ERA Economics, looks at California dairy sector trends, market conditions, consolidation and attrition, as well as the potential impacts of direct regulation of dairy methane emissions. The timely analysis highlights the successful collaboration between the state and the dairy industry in working toward achieving the 40% methane emission reduction target set by Senate Bill 1383 (2016), all while striving to produce milk and dairy products in an economically viable and sustainable manner.

“California is on track to meet its ambitious goals with its dairy methane reduction efforts. The data shows that replacing successful already in place incentive-based programs with direct regulation would be costly to both the climate and the economy,” said Dr. Michael McCullough, professor of agribusiness at California Polytechnic State University, San Luis Obispo, and a lead author of the report. “California’s methane reduction efforts would suffer, significant emissions leakage would occur, and small dairies would be hit the hardest, leading to increased dairy farm consolidation in the state.”

Specific findings of the analysis include, but are not limited to the following: 

  • Dairy sector consolidation is continuing and accelerating in California and across the U.S. as fewer dairies remain in production each year.
  • Statistical tests found no evidence that adoption of dairy digesters is causing consolidation to larger dairies. Consolidation is driven by other factors.
  • Eliminating low carbon fuel standard (LCFS) credits and directly regulating methane emissions would cause:
    • $675 million in direct annual net losses to California dairies, not including impacts to local communities or other businesses
    • Significant emissions leakage of 1.43 MMTCO2e as milk production shifts to other states
    • Abandoned digester projects, resulting in loss of an additional 2.44 to 3.51 MMTCO2e
  • Small farms would be negatively impacted disproportionately by the increased regulation.

USDA to begin issuing $2.14 billion to agricultural producers through key conservation and safety net programs

The USDA announced it will begin issuing more than $2.14 billion in payments to eligible agricultural producers and landowners – providing much needed support through key conservation and safety net programs. Producers should soon receive payments from USDA’s Farm Service Agency (FSA) for their participation in these programs aimed to conserve natural resources and keep family farms economically viable.

Specifically, program participants are expected to receive more than $1.7 billion through the Conservation Reserve Program (CRP) and CRP Transition Incentive Program (CRP TIP) and more than $447 million through the Agriculture Risk Coverage and Prices Loss Coverage (ARC/PLC) programs. Additionally, the FSA is announcing an investment of $21 million for projects to better measure the effectiveness of CRP.  

For more information on available FSA programs, contact your local USDA Service Center.