Editor’s note: At Progressive Dairyman’s press deadline, more than 1,830 dairy cows in Washington’s Yakima Valley reportedly perished as a winter storm hit the county, dumping up to 2 feet of snow and carrying 30- to 80-mile-per-hour winds.

A recent newsletter from the Federal Reserve district of Chicago, summarizing survey responses from commercial ag bankers in Illinois, Indiana, Iowa, Michigan and Wisconsin, said the region’s dairy sector was under the most stress of any in agriculture. Nonetheless, like spring, some optimism is emerging.

The two dairy behemoths on the opposite ends of the Southwest – Texas and California – have been on somewhat divergent paths over the past couple of years.

Profitability and equity erosion continue to be a concern in the Northeast, according to Zach Myers, former North Carolina dairy farmer who is now the dairy risk education manager for Pennsylvania’s Center for Dairy Excellence.

When final numbers are in, 2018 milk production in the 10 Southeast states will be down about 4 percent from 2017, according to Calvin Covington, retired dairy co-op executive.

The past four years have been financially challenging for U.S. dairy farmers. That’s a relatively long time without a “good” year to give some relief.

Editor's note: This original version of this article was updated to include indemnity and premium calculations. The USDA Farm Service Agency (FSA) announced the January 2019 income over feed cost margin was $7.99 per hundredweight (cwt), triggering the first payment for eligible dairy producers who purchase the appropriate level of coverage under the new but yet to be established Dairy Margin Coverage (DMC) program. The payment isn't expected until July.

Digest Highlights

• 2018 dairy cow slaughter highest in three decades 
• Dean Foods considering business options
• Renewable Dairy Fuels expands at Fair Oaks Farms
• GI cheese name restrictions mean severe economic consequences to U.S. dairy
• February Class IV price improves
• Idaho company plans large aseptic milk facility
• Pennsylvania farm bill includes focus on dairy
• Minnesota program offers cash flow loans
• Dairy Forward Pricing Program reauthorized

USDA Secretary Sonny Perdue laid out a tentative timeline for implementation of the new Dairy Margin Coverage (DMC) program before a recent House Ag Committee meeting. Dairy farmers enrolling in the program will likely see the first indemnity payments in early July.

Tom Vilsack, president and chief executive officer of the U.S. Dairy Export Council (USDEC), updated dairy producers and industry representatives on dairy export efforts during the Western Dairy Management Conference on Feb. 26 in Reno, Nevada.