Dairy Farmers of America reports milk processing plants are already operating at capacity, forcing strategic milk dumping at large dairies. West Bend, Wisconsin, dairy farmer Ryan Elbe spoke to the Midwest Farm Report. “Anything we never thought could happen seems to be happening the last couple weeks. There is a lot of pride in producing milk so the thought of just dumping it down the drain is definitely disheartening.” COVID-19 has resulted in sudden changes in demand. There was an initial surge in buying at the grocery stores, but that has leveled off. School closures and the loss of restaurant business have resulted in a sudden oversupply of milk.

DFA responds to milk dumping
    Dairy Farmers of America vice president of corporate communications Kristen Coady said the company is “diligently working to ensure our farm families’ milk continues to be picked up (and) our plants continue to operate.” Due to COVID-19 and the subsequent school and restaurant closures, there is a milk surplus. Since plants are already operating at capacity “in combination with the perishable nature of our product has resulted in a need to dispose of raw milk on farms in some circumstances.” Coady said DFA is exhausting “all possible avenues” to find a home for their farmer/members’ milk.

Bleak situation
    According to University of Minnesota Extension Economist Marin Bozic, the milk check has been hurt by the coronavirus pandemic. “Looking at recent charts of Class III milk prices, there were highs a few months ago of $18 per hundredweight. Now, the most decent price is around $12.84 per hundredweight,” Bozic said. “Just as farmers were coming off five years of misery, we got hit by the virus in the most vicious way.” Foodservice demand for U.S. dairy products is down. Not all of that demand is gone, but no one is stepping forward with new demand either. Bozic said it is important to set a price floor for milk so farmers do not find themselves in a situation where low prices hurt even more. “Set the floor on part of the milk, wait a little bit and if prices recover, set another floor. If the markets don’t recover, pull the trigger anyway,” Bozic said. “Now is the time to take protection for 2021. By all means, be optimistic and hope for the global recovery, but farmers shouldn’t bet their farms on that.”

Coronavirus to accelerate consolidation of small dairies
    There has been a significant uptick in dairy consumption at home, but that has been offset by the downturn in foodservice business. There are reports of milk being dumped and trucks being turned away at the dairy plants. From Feb. 11 to April 1, National Milk Producers Federation Chief Economist Peter Vitaliano estimates U.S. dairy farmers lost $6 billion of gross total income. Vitaliano sees long-term implications for the dairy sector. “We’ve already seen over the last two years, the number of commercial dairy farms dropping at a faster rate than has been the case in the last decade-and-a-half,” Vitaliano said. “Unfortunately, I expect that is going to continue and further consolidate production at the farm level.” Since there is a lag in what happens with the markets, dairy farmers will not see the full impact in their milk check until May or June.

NMPF seeking solutions to market downturn
    There are economic challenges for the U.S. dairy industry, including the impacts of COVID-19. “In late 2019, there was a light at the end of the tunnel in terms of milk prices. Now, prices are expected to be lower in the coming months,” said Paul Bleiberg, vice president of government relations, National Milk Producers Federation. “We’re trying to make sure producers can stay afloat during this challenging time and get product to places where it will be consumed.” The NMPF would like the United States Department of Agriculture to re-open signup for the 2020 Dairy Margin Coverage program.

Stimulus package includes relief for dairy farms
    Help is coming for farmers and ranchers impacted by COVID-19. The USDA is in the process of figuring out a formula for assistance. “Agriculture Secretary Sonny Perdue is having the chief economist and staff look at the different aspects of agriculture, trying to figure out what commodities have been the most damaged by the coronavirus. Also, looking at which ones will have the most damage going forward,” said Collin Peterson, chairman, House Agriculture Committee. “USDA may come up with a system like they did the last time, but it would be a different formula. It’s not facilitation payments based on trade, it’s damage that’s been done by COVID-19.” The USDA has $9.5 billion to help livestock and specialty crop producers and local food providers.

Court approves DFA/Dean Foods deal
    Dairy Farmers of America will acquire a substantial portion of assets from Dean Foods through the Chapter 11 bankruptcy process. The winning bid was $433 million for 44 facilities. The agreement received court approval April 3, and the deal is expected to be finalized by early May.

MPCA reviewing changes to feedlot permits
    According to Minnesota Milk Producers Association executive director Lucas Sjostrom, changes to the National Pollutant Discharge Elimination System permits influence dairy farming. “This impacts large dairies and the dairies with fewer cows could see the regulations copied and pasted at the county permit level, township level or in state law,” Sjostrom said. “The Minnesota Pollution Control Agency made positive changes since the first draft. I appreciate that they are sticking to science in these conversations.” Sjostrom also said the agency is working with Minnesota farm groups on the permit changes. “In the first draft, the agency went for ease of regulation instead of farmer ease. They were picking dates based on the calendar instead of temperature and land cover. It was the different wording that gave us some concern. Getting manure out when its 65 degrees in November with no snow on the field is different than getting manure out when it’s 65 degrees in February with one foot of snow on the field,” he said.

Federal court rules in favor of beef checkoff
    The U.S. District Court of Montana has ruled in favor of USDA and the Montana Beef Council in a legal battle over the beef promotion and research checkoff program. R-CALF USA wanted the beef checkoff declared unconstitutional in 15 states, arguing the program is a violation of the First Amendment. To no one’s surprise, R-CALF does not support the ruling and the National Cattlemen’s Beef Association called it a major victory.

Dille passes
    Longtime Minnesota legislator Steve Dille, 75, has passed away. The Dassel Republican served in the House from 1987 to 1992 and in the Senate from 1993 to 2010. Dille, who was a farmer and veterinarian, was a member of the agriculture committee.

Trivia challenge
    Finland leads the world in per-capita milk consumption, totaling 34.3 gallons per year. That answers our last trivia question. For this week, we know the United States produces the most milk. What country is ranked second? 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.