According to a new study from the University of Wisconsin-Madison, the dairy industry is responsible for nearly half of Wisconsin’s agricultural revenue. This report, called The Contribution of Agriculture to the Wisconsin Economy,’ is compiled every five years. In 2017, the dairy industry had a $45.6 billion impact on the state’s economy.

August Class III price moves higher
    USDA has announced the Class III milk price was at $17.60 per hundredweight in August. That’s a nickel higher than July and $2.65 higher than August of last year. This was the highest base price for Class III milk since December 2014.

Cow numbers decline
    In August, the dairy herd declined 9,000 head from the previous month. Compared to one year ago, milk cow numbers are down 82,000 head. At 9.3 million head, the U.S. dairy herd is the smallest since January 2016.

Positive outlook for cull cow market
    After a big increase earlier this year, dairy cow slaughter has dropped below year ago levels. In August, dairy cow slaughter is 1 percent below last year. Beef cow slaughter is up nearly 1 percent with some earlier culling this year. As slaughter moved lower, cow prices have edged higher. Texas A&M Extension Economist David Anderson said the number of dairy cows that went to market during the first half of this year may reduce the potential numbers going to market this fall. Cow weights are also down from 2018 levels, supporting the cull cow price and the 90% lean fresh beef price.

Relationships are vital to trade
    Tom Vilsack, President and CEO, U.S. Dairy Export Council, is back in the United States following a trip to China and Japan. Vilsack said it’s important both governments and industry professionals understand the value of the relationship between countries. There is still uncertainty in discussions between the U.S. and China. “There is hope that things will get worked out, but the reality is what the United States is asking China to change is something that is fundamental to their economy,” Vilsack said. “That’s not going to be an easy ask or lift for the Chinese. I’m not confident at this point we’ll see a breakthrough in the discussions.” Vilsack said there is a different attitude in China compared to Japan. Japan is acting as an ally, and there may be a better opportunity in Japan to reach a mini agreement to provide greater market access for U.S. agricultural products.

Dairy exports decline
    During July, U.S. dairy exports totaled 378.7 million pounds. That is down nearly 22 million pounds from July 2018. Total cheese exports were steady with last year. Exports of nonfat dry milk and skim milk powder dropped nearly 11 million pounds. Dry whey exports declined 9.6 million pounds. Whey protein concentrate exports were down 663,000 pounds, whole milk powder exports declined 1.6 million pounds and butter sales were down 2.1 million pounds.

DMC deadline approaches
    The signup deadline for Dairy Margin Coverage is Sept. 20. DMC is guaranteed to pay all dairy farmers enrolled at the maximum $9.50 per hundredweight coverage level for every month of production this year through July. The National Milk Producers Federation President/CEO Jim Mulhern said DMC offers better support than the former Margin Protection Program. “It’s worthwhile for every farmer.” USDA Undersecretary Bill Northey concurred. “We all hope the margin is much better than a $9.50 margin coverage level, but if it is not, for a small premium, you get coverage. For most producers, it makes a lot of sense to be covered.”

AFBF market intel highlights block-barrel spread
    Block and barrel cheese prices traditionally traded in line with each other. The spread between block and barrel cheese began to widen in 2017. A new report from American Farm Bureau Market Intelligence said increased barrel cheese production and the demand for whey proteins from barrel cheese are responsible for the gap between block and barrel cheese. AFBF said that difference is responsible for a $600 million reduction in farm revenue over the past two and a half years. Strong cheese exports, primarily in blocks, are also a factor in this price spread.

Record interest in Holstein registration
    Holstein Association USA reports dairy farmers registered and identified an all-time record of 749,000 head in 2018. Holstein USA CEO John Meyer credits the increased interest on proper identification of dairy cattle. “The number of dairy farms in this country has dropped considerably to under 40,000 over the last 15 years, but we continually register and identify more cattle,” Meyer said. “We’ve grown our identifications by 90 percent over the last 15 years in a market where the number of dairy farms has dropped over 47%.”

Funds released for counseling services
    The joint finance committee for the Wisconsin legislature has approved $200,000 to be used for mental health counseling services for farmers. The funds will be administered through the Wisconsin Farm Center, which is part of the Wisconsin Department of Agriculture, Trade and Consumer Protection.

Dairy research farm planned
    The largest research dairy farm in the United States is being built in Idaho. The University of Idaho is planning a 2,000-cow dairy operation with an additional 1,200 acres for agronomic research, feed production and nutrient management. The project is expected to break ground in 2021 and milking the first cows by 2024.

Hughes to lead WEDC
    Governor Tony Evers has appointed Melissa Hughes as the chief executive officer for the Wisconsin Economic Development Corporation. Hughes has been the general counsel for Organic Valley for the past 15 years. Oct. 1 is the start date for Hughes in her new role.

WFU hires watershed coordinator
    Bill Hogseth has been hired as the Wisconsin Farmers Union’s watershed coordinator. This is a new position for WFU and is designed to increase farmer engagement, expand participation in incentive programs and influence issues within the Mississippi River watershed. Hogseth is a former biologist with Wisconsin DNR.

Trivia challenge
    On a per-capita basis, West Virginia leads the nation in pizza consumption. That answers our last trivia question. How many slices of pizza does the average American eat per year? We’ll 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.