The dairy industry has seen huge swings in the market. “We had $2 cheese, and we went to $1 cheese, and then it was $3 cheese, and now we’re back in the neighborhood of $2 again,” said Michael Dykes, president/CEO, International Dairy Foods Association. With the loss of the foodservice business, some food processors have been unable to fulfill contracts. Others have seen a buildup in inventories. Dykes said access to capital is critically important for those companies. The dairy recourse loan program is part of the discussion for the latest COVID-19 relief package.

Demand for cheese declines, prices take a tumble
    Cheese prices have taken a nose dive. AgResource Company president Dan Basse said that is due in part to a drop in demand as the United States Department of Agriculture Farmers to Family Food Box program winds down. “We’re now seeing the dairy markets reflecting less demand, and because we’re not seeing a big change in cow numbers, prices retreated sharply in recent days,” Basse said. “Then, the cheese markets were down a record amount.” Basse said the government stimulus program produced a sugar high, but it is not a long-lasting situation.

U.S. milk production increases in August report
    In the latest USDA World Agricultural Supply and Demand Report, the milk production for 2020 rose 300 million pounds to 221.8 billion pounds. That includes a higher than expected growth in the amount of milk per cow.

COVID-19 reveals areas of improvement for food supply chain
    In a virtual discussion on the U.S. food supply chain at Farmfest, Associated Milk Producers Incorporated co-president and CEO Sheryl Meshke said the COVID-19 pandemic is unmasking weaknesses in the system. “If our food supply is a pillar of national security, we need to focus on critical questions,” Meshke said. “Here’s two: Do farmers have a secure market? And, are we providing food security for this country and beyond our borders?” AMPI is also analyzing consumer purchasing data, noting consumers are going back to the basics, picking foods they are familiar with. “For dairy, that means significant shifts. Through July 12, year-to-date retail butter sales are up 31.5% and cheese is up 16.7%. That’s significant,” Meshke said. “Will that shift continue? That will be a question we’ll watch closely through our customers and consumers. Our cooperative will also need to continue to focus on a diverse manufacturing portfolio and customer base to keep milk moving through those sectors.”

NCFC wants no farmer left behind in CFAP sign-up
    National Council of Farmer Cooperatives president Chuck Conner said the Coronavirus Food Assistance Program sign-up is more difficult to monitor and determine its success because it is much different from a regular farm program. “We just don’t know for sure what to expect, but we do know that we don’t want anyone left behind,” Conner said. “If a producer’s commodity got approved late in the game, we want them to have the full opportunity to apply.” Conner thinks the USDA will be sympathetic to CFAP sign-up requests because the agency wants the program to be successful. “I’m very inclined to think Agriculture Secretary Sonny Perdue doesn’t want this to drag on forever, you can’t run an agency that way, but USDA wants to give people ample time to apply,” he said.

Vilsack: U.S. dairy needs Canada to comply with USMCA
    The United States-Mexico-Canada Agreement requires Canada to eliminate their class six and seven milk pricing systems and to have a fair tariff rate quota for dairy. The U.S. dairy industry said Canada is limiting access to their dairy market, filling quotas from competitors who have no incentive to export to the country. “At this point, they have limited our ability, which means we’re not likely to sell as much product as we hoped,” said Tom Vilsack, CEO of the U.S. Dairy Export Council. “We’ve called on the Canadian government to rethink the position.” Canada has six months to eliminate and replace their class six and seven milk pricing systems. “In order for prices to be set in the U.S. in a way U.S. dairy farmers can profit and stay in business means we have to find a market for additional milk,” Vilsack said. “That market could be Canada if they comply with the agreement.”

Record cheese exports
    U.S. exports of cheese climbed to a record high 84.7 million pounds during the month of June. Mexico was the biggest customer and that was before the USMCA took effect July 1.

Senators seek food name safeguards in trade talks
    Sixty-one U.S. Senators sent a letter to U.S. Trade Representative Robert Lighthizer and Agriculture Secretary Sonny Perdue asking them to establish a core U.S. policy objective in all trade-related discussion regarding specific common food names. The senators are urging the government to secure stronger safeguards in trade negotiations for common food and wine terms. According to the National Milk Producers Federation, as the European Union becomes increasingly aggressive in restricting export opportunities, U.S. trade policy will need to respond in kind to combat EU misuse.

Advisory committee reviews dietary guidelines
    The Dietary Guidelines Advisory Committee is taking testimony on proposed changes. The National Milk Producers Federation was pleased dairy remains its own category and does not allow the inclusion of plant-based drinks or foods. The National Cattlemen’s Beef Association said the recommendations should identify beef as a lean meat option, recognizing cuts like sirloin.

Saputo merges two dairy divisions
    Saputo has merged its two U.S. divisions, cheese and dairy foods,into a single business unit. Now known as the dairy division, Saputo said the new structure will allow the company to be more efficient in its business dealings. The announcement was made when Saputo released its financial statement. The dairy processor had first quarter revenues of $2.55 billion. That is a 7.6% decline from last year.
    
Merck acquires IdentiGEN
    Merck Animal Health has completed its acquisition of IdentiGEN. IdentiGEN’s technology uses DNA and data analytics for animal traceability. That includes the traceback systems that are verifiable from farmer to table. Terms of the deal were not announced.

Hazlett returns to Indiana
    The senior advisor for rural affairs at the White House has accepted a job as the senior director of government relations and public affairs at Purdue University. From 2017-19, Anne Hazlett was the assistant to the secretary for rural development at USDA. Before that, Hazlett was legal counsel for the House and Senate agriculture committees.

Trivia challenge
    The Brown Swiss dairy breed is derived from the triple purpose Braunveih breed. That answers our last trivia question. Kraft Foods introduced a cheese sauce product in 1953. For this week, what is the name of that product? 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.