October 27, 2022 at 7:24 p.m.

Milk pricing system scrutinized

By Don Wick- | Comments: 0 | Leave a comment

Last year, Secretary of Agriculture Tom Vilsack requested the U.S. dairy industry get into one room and build consensus to find solutions to the shortfalls in the federal order system. American Farm Bureau economist Danny Munsch said the system has not been updated in 20 years in a major way. “In that time, we’ve gone from a fluid milk-focused market to more of the manufactured goods driving the market, and the Federal Milk Marketing Order system doesn’t reflect those changes,” Munsch said. Due to other market disruptions, like COVID-19, farmers faced massive negative producer price differentials on their milk check. The AFBF hosted the weekend forum in Kansas City, Missouri.

AFBF outlines farm bill priorities
That list includes the continuation of current farm bill funding, prioritization of crop insurance, and adequate staffing and resources for U.S. Department of Agriculture technical assistance. “We also believe that transparency is needed in our dairy system,” said Zippy Duvall, president, American Farm Bureau Federation. “We believe that because higher costs of production, it justifies the increase in the reference prices for the Title I commodities to ensure farmers remain economically viable.” The AFBF board of directors unanimously approved the policy recommendations, but the final approval will come during the group’s annual meeting in January 2023.

A new perspective on trade
The White House newly-released National Security Strategy includes a change in trade policy. The report said the United States’ focus on fair and open trade has helped corporations rather than workers. The Biden administration said it will seek new trade opportunities that protect labor standards and the environment. To combat food insecurity, the administration plans to keep agricultural markets open, increase fertilizer production and invest in climate-smart agriculture.

WTO predicts trade downturn
The World Trade Organization is forecasting a significant decline in global trade growth next year. Growth is forecast at 1%, compared to a previous estimate of 3.4%. The WTO director-general urged member-countries to avoid trade restrictions to counter supply chain problems.

Dairy industry seeks better ocean freight service
Federal Maritime Commission Chairman Daniel Maffei sat down with representatives of the U.S. Dairy Export Council and National Milk Producers Federation to discuss supply chain issues. The dairy groups emphasized the continuing problems with high costs, unreliable scheduling and the need for better service from the ocean freight system.

Managing the three-headed dragon
Virginia Tech professor emeritus David Kohl said it takes solid financial knowledge to manage the three-headed dragon of price volatility, higher input costs and rising interest rates. “If it’s not well managed, that will take liquidity, profit and equity off the balance sheet, but those with a high business IQ will actually put profit, liquidity and equity on the balance sheets,” Kohl said. Over the rest of this decade, Kohl said “the better will get better and the worst are going to fall behind.” Good relationships are also key during tough times.

Environmental benefits of dairy production
The Association of Equipment Manufacturers, the National Milk Producers Federation and Dairy Farmers of America unveiled a study on the benefits of modern dairy technologies during World Dairy Expo. “If you look at the role technology has played, we’ve seen a tremendously positive impact on milk yield,” said Chad Huyser, president, Lely North America. “We believe the technology adoption can be attributed to a milk yield increase of about 6% and the data supports that we’ve been able to reduce the feed usage by what’s the equivalent of 3,200 NFL football stadiums full of feed.”

Consumer misconceptions
While 98% of U.S. farms are family-owned and operated businesses, most Americans believe less than half of the farms are family farms. A survey of 1,000 adults nationwide was conducted by Land O’Lakes. This research found 87% of those surveyed are interested in knowing where their food comes from. Millennials were at the top of that list.

Beyond Meat cuts jobs
Beyond Meat, which produces plant-based meat substitutes, is cutting 200 jobs and has issued a warning to investors about its revenue outlook. Beyond Meat Chief Financial Officer Douglas Ramsey is also leaving the company. Ramsey was suspended in September after an altercation at a college football game.

Meatless no more
After two years in operation, JBS USA is shutting down its U.S. plant-based food business. The meatpacking company will put its focus on its plant-based business in Brazil and Europe.

UWRF Dairy Pilot Plant renovation
The renovation of the University of Wisconsin-River Falls Dairy Pilot Plant is scheduled to be complete by spring. The facility came online in 1982 as a 1,500-square-foot lab. The upgraded plant will be 6,000 square feet. Ellsworth Cooperative Creamery recently donated an additional $30,000 to the project. That puts the company’s total investment at $150,000.

UW-CALS honors
The University of Wisconsin-Madison College of Agricultural and Life Sciences honored exemplary leaders. The Honorary Recognition Award was presented to Andy and Steve Diercks, Liz Henry and George Siemon. The Dierckses are a father-son combination who were recognized for their achievements in Wisconsin’s potato industry. Henry served in numerous leadership positions, including associate director of the university’s Renk Agribusiness Institute. Siemon established Organic Valley and is a leader in building demand for organic agricultural products. UW presented its Distinguished Service Award to Richard Staub, a 40-year member of the faculty and UW leadership. The Distinguished Alumni Award went to Barry Jacobson and Jenny Scott. Jacobson enjoyed a career in at three land-grant universities, including time as dean of Montana State University College of Agriculture. Scott devoted her career to the advancement of safe food production in academia, industry and government service.

Ducheneaux to speak at WFU convention
Farm Service Agency Administrator Zach Ducheneaux will deliver the keynote address at the Wisconsin Farmers Union State Convention Dec. 9-11 in Wisconsin Dells, Wisconsin.

Trivia challenge
Switzerland consumes more chocolate on a per-capita basis than any other country in the world. That answers our last trivia question. For this week’s trivia, when did October Co-op Month become a national celebration? We will have the answer in the next edition of Dairy Star.
    Don Wick is owner/broadcaster for the Red River Farm Network, based in Grand Forks, North Dakota. Wick has been recognized as the National Farm Broadcaster of the Year and served as president of the National Association of Farm Broadcasting. Don and his wife, Kolleen, have two adult sons, Tony and Sam, and five grandchildren, Aiden, Piper, Adrienne, Aurora and Sterling.


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