Ending the first quarter of 2020, dairy markets have been characterized by two images: a coronavirus hangover and toilet paper. Latest information from the USDA’s Dairy Market News and retail data provides an overview of regional and national dairy conditions as they relate to the COVID-19 outbreak.

In normal times, dairy risk management tools are a means to provide break-even protection and even lock in some profitability. With the current and likely prolonged impact of COVID-19 on dairy markets, producer should implement risk management strategies as a means to mitigate further losses, warns Marin Bozic, University of Minnesota dairy economist.

U.S. dairy industry leaders are pleased an economic stimulus package contains provisions to help support the nation’s dairy producers and processors, but they remain hopeful additional financial aid and other USDA policy and program changes will be forthcoming to offset anticipated losses due to COVID-19.

Digest Highlights

• Maryland & Virginia Milk Producers donate milk to food banks
• FDA relaxing VCPR requirements to allow telemedicine
• DHS announces flexibility in requirements related to Form I-9 compliance
• DFW accepting nominations electronically
• More dairy meetings canceled due to coronavirus concerns
• U.S.-China Phase I agreement moves forward

With the backdrop of COVID-19, dairy economists Mark Stephenson and Bob Cropp offered a sobering – if not dire – outlook for U.S. dairy farmers, urging them to consider voluntarily cow culling to control milk supplies and head off further price declines.

As the full national, indeed global, scope of the coronavirus pandemic begins to come into focus, it is becoming clearer that we are experiencing a public health crisis unlike anything we have seen in our lifetimes.

Digest Highlights

• Dairy margins squeezed by COVID-19 impact
• PMMB maintains over-order premium at $1 per cwt
• April Class I base: $16.64 per cwt
• Global Dairy Trade prices mixed
• National Dairy Board nominees sought
• DFA plans improvements at plant in Zumbrota, Minnesota
• DOT emergency declaration relaxes hours-of-service regulations
• Dairy companies urged to self-certify as part of critical infrastructure
• California QIP ‘3.5 statute’ hearing postponed
• More dairy meetings canceled due to coronavirus concerns

On the surface, February 2020 milk production jumped more than 5% compared to the same month last year. However, with February 2020 containing an extra day due to “leap year,” the adjusted increase is closer to 2% on a daily basis.

Editor's note: This article was updated on March 21 to include additional comments from Dairy Farmers of America. An updated court docket outlines the bidding and sales procedures and timeline as Dean Foods continues its journey through bankruptcy. The order (docket number 1178) was signed by Judge David Jones at the conclusion of hearing, held March 19, in the U.S. Bankruptcy Court for the Southern District of Texas, Houston, Texas.