The 2018 farm bill adjusted milk pricing rules to enhance risk management for milk processors, cooperatives and dairy farmers. American Farm Bureau Federation Chief Economist John Newton said this change has unintended consequences for the dairy farmer. “It got rid of what was the higher-of, in the pricing formula, and replaced it with a simple average of Class II and IV milk prices,” Newton said. Newton said that has resulted in $400 million in lost revenue for dairy producers. “Since this didn’t proceed through the normal rulemaking process to amend federal orders, farmers across the country are likely to consider changes to the federal order program to improve milk prices,” he said.

Deficit triples over the past year
    The U.S. budget deficit tripled in the fiscal year that ended Sept. 30. The budget gap totaled $984 billion one year ago. The nonpartisan Congressional Budget Office said that has widened to $3.1 trillion. Federal debt in the 2020 fiscal year is expected to be more than 100% of the gross national product.

Dairy farmers encouraged to enroll in DMC
    Signup for the Dairy Margin Coverage program is underway. Farm Service Agency Administrator Richard Fordyce said 13,000 dairy farmers signed up for the 2020 program. “It wasn’t as high as we had in 2019; we do believe it is a great tool to provide risk management coverage for dairy operations,” Fordyce said. There is an enhanced online tool to help dairy farmers weigh the benefits of DMC participation. “Producers will be able to put their own unique farm production information through the tool to make a good decision,” he said. Signup runs through Dec. 11.

Deal with dairy labeling standards
    In an open letter to Food and Drug Administration Commissioner Stephen Hahn, National Milk Producers Federation President and CEO Jim Mulhern said the agency should take action on its promise to deliver “clear, transparent and understandable labeling” on dairy products. During Hahn’s confirmation hearing, he promised to work on the issue of dairy labeling standards. The dairy industry opposes the use of dairy terms, like milk, for plant-based beverages.

Support given to regulatory relief
    Over 100 farm organizations have signed a letter of support for a bill that would modernize the agricultural exemption for hours-of-service trucking rules. This proposal would provide a 150-air-mile exemption from the backend of hauls before the hours-of-service rules apply. Animal welfare considerations are behind this bill. The groups supporting this bill include the American Farm Bureau Federation, National Milk Producers Federation and the National Council of Farmer Cooperatives.

Net Zero Initiative launched
The Innovation Center for U.S. Dairy has announced its Net Zero Initiative, an industry-wide effort to achieve carbon neutrality, optimum water usage and improved water quality by 2050. On-farm pilot projects and the development of new markets are being promoted to create incentives for dairy farmers to adopt environmental stewardship goals.

Supply/demand numbers updated
    The outlook for U.S. milk production was raised from last month with a slight increase in cow numbers and a more rapid pace of growth in milk per cow. The Class III milk price forecast increased 75 cents to $18 per hundredweight. The recent uptick in milk prices is also leading to an increase in the milk production forecast for 2021.

August export data released
    Compared to one year ago, U.S. dairy exports are up 14% in value for the January-August time period. Sales to China, Canada, Australia and Vietnam are responsible for much of the growth. Sales during the same time were up 12% in volume. “Year-to-date, we are on track to break $6 billion in U.S. dairy exports this year,” said Michael Dykes, president/CEO, International Dairy Foods Association.

Japan cuts TRQ for butter
    Japan has cut its 2020 fiscal year tariff rate quota for butter by 30%. Japanese butter stocks were up more than 40% from one year ago. Japan has already tendered for 12,000 metric tons of butter. That leaves only 2,000 metric tons of prospective sales to Japan between now and March.

DFA must divest of certain Dean Foods’ property
    U.S. District Judge Gary Feinerman has ordered the mandatory divestiture of the former Dean Foods plants in DePere, Wisconsin, and Harvard, Illinois. Dairy Farmers of America must also sell certain intellectual properties, including the use of the Dean’s name in Wisconsin, Illinois, Indiana and the Upper Peninsula of Michigan and the licenses for the TruMoo and DairyPure brand names nationwide. In April, a U.S. bankruptcy court approved the sale of Dean Foods plants to DFA for $433 million. That ruling came five months after Dean Foods filed for Chapter 11 bankruptcy protection.

Dairy Innovation Hub highlights first year accomplishments
    The Dairy Innovation Hub has released its first annual report. More than 50 projects have been awarded funds across three campuses and four priority areas. There is nearly $500,000 in documented spending for the first six months toward dairy-related talent, capacity-building equipment and research and $5.1 million allocated for a new dairy facility and staffing for the 2019-2021 biennial. The Dairy Innovation Hub will host its first virtual Dairy Summit Nov. 18.

FarmFirst schedules virtual annual meeting
    The FarmFirst Dairy Cooperative board of directors has dropped its 17 in-person district meetings for a single-day virtual program. The virtual meeting will be Dec. 2.

4-H Hall of Fame class of 2020 named
    The Wisconsin 4-H Hall of Fame has inducted nine new laureates. This year’s honorees are retired 4-H youth development outreach specialist Kay Hobler, Linda and Joe Pribek of the Wisconsin 4-H Horse Association, Dodge County 4-H leader Sherry Helmer, Sauk County 4-H leader Dorothy Harms, 4-H dairy volunteer leader Bob Hagenow, Sauk County Extension 4-H volunteer leader Judy Lewis, retired Extension livestock specialist Dr. Duane Wachholz and Pierce County 4-H volunteer Kathy Geraets.

Trivia challenge
    Dairy cows generally consume 30 to 50 pounds of water per day. That answers our last trivia question. For this week, what is the optimum temperature for serving milk? 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.