The Dairy Margin Coverage program has not been established yet, but USDA has already announced the second payment for dairy farmers. The February income over feed cost margin was $8.22 per hundredweight. Sign-up for the new Dairy Margin Coverage will begin in mid-June, but retroactive payments will be made. Farm Service Agency Administrator Richard Fordyce describes this as an important safety net for dairy farmers, “helping them weather shifting milk and feed prices.”

ITC evaluates USMCA
    In the International Trade Commission’s analysis of the U.S.-Mexico Canada Agreement, there is a projected 1.1% increase in exports for agricultural commodities. American Farm Bureau Federation Economist Veronica Nigh said that is the equivalent of $2.2 billion. “When we renegotiated USMCA, we also had to give Canada more access to our dairy and sugar markets. The analysis suggests U.S. food and ag imports would increase as well to 1.3%.” This analysis is considered the last box the administration needs to check off before submitting legislation to Congress. “We’re looking forward to learning more about when the administration would move forward with that,” Nigh said. “Everyone would like to have the new agreement put to bed before the fall arrives.”

Dairy groups support USMCA
    U.S. Dairy Export Council President/CEO Tom Vilsack said the ITC study moves the USMCA process closer to ratification. “We shipped $1.4 billion in dairy products to Mexico last year, which accounts for more than one quarter of U.S. dairy exports. Without a trade agreement with Mexico in place, the dairy industry would be hard-pressed to maintain and expand those sales.” Vilsack said Europe is expected to implement a new trade deal with Mexico next year and Congress must pass USMCA to support the U.S. market in Mexico. National Milk Producers Federation President and CEO Jim Mulhern said the United States lost an average of seven dairy farms a day in 2018 and exports help reverse that trend.

Spring flush influenced by loss of dairy farms
    Since last year, small dairy farms have been exiting the business at a rapid pace. USDA Dairy Market News is reporting more medium-to-large dairy farms are “calling it quits.” Fluid milk and processors have hinted spring flush volumes are lower than usual this year. In addition, hay shortages have been noted in the Upper Midwest.

Seeking long-term solutions
    Dairy industry reform was the theme for the Dairy Together Roadshow discussion in Greenwald, Minn. Local dairy farmers, the National Farmers Organization and state Farmers Union organizations met to discuss solutions for the dairy industry challenges. University of Minnesota Professor Emeritus in Economics Richard Levins told attendees there is a price problem and a structural problem. Levins said fixing dairy prices does not solve both problems. As a solution, Levins presented the Family Dairy Farm Relief Act as an emergency stopgap to address the crisis. “It works through the FSA offices. You can bring in your production statement and you’d get a payment for the difference between your operating costs and the lowest for the month. It’s a very simple program.”

Export growth opportunities
    One of the brightest spots for the U.S. dairy industry is exports. According to Midwest Dairy CEO Lucas Lentsch, last year was a record-year high with 16% of all dairy solids exported. There is market growth potential in Mexico and Asia. “About 1.4 billion Chinese people today are eating a pizza once every 45 days. If you have 1.4 billion people eating pizza once each month versus once every 45 days, that’s an uptick of opportunity,” Lentsch said. “There’s also no question the Middle East and Africa will also be looking to get more reliable dairy nutrition into their diet.”

Progress seen in U.S.-China trade talks
    Senior level Trump Administration officials are tentatively scheduled to be in Beijing during the week of April 29. That will be followed by similar trade meetings between the U.S. and China in Washington, D.C. during the week of May 6. That is on top of the most recent negotiations that have taken place through video conferencing. There is speculation a deal could be in place by late May or early June, but the two sides have frequently missed self-imposed deadlines.

Agriculture needs a win
    A handful of Minnesota farmers and agribusiness professionals attended President Trump’s roundtable discussion in Burnsville, including Minnesota Farm Bureau President Kevin Paap. Paap said there were no questions from the audience. The president did talk a lot about tax cuts and about the importance of trade. “Once you lose a market, it’s really hard to get it back. Let’s start with our closest neighbors, Canada and Mexico,” Paap said. “Let’s get the U.S. Mexico Canada Agreement taken care of and then, move onto Japan and other agreements. We need a win in agriculture.” Paap was a little disappointed USMCA was not mentioned. Trump did address infrastructure needs including strengthening rural broadband. This was Trump’s first public appearance in the Twin Cities since becoming president.

Traceability projects to be funded
    USDA is investing $1 million to fund animal disease traceability and electronic identification projects in cattle. The goal is to determine the effectiveness of radio frequency identification tags in “high-volume, fast-paced environments.” Projects will track cattle movement and collect health information.

Saputo downplays Dean Foods story
    The Toronto-based Globe and Mail has reported Saputo is considering a takeover of U.S. dairy processor, Dean Foods. In a conference call with investors after the story was reported, Saputo officials downplayed this possibility. Saputo CEO Lino Saputo did not mention Dean Foods directly, but said acquisitions in the fluid milk sector is not “on our radar screen.”

New dairy beef branded program
    The American Simmental Association and Holstein USA have launched a new branded beef program. This is the first time beef and dairy breed organizations have established a program of this kind. The HOLSim brand is designed to provide additional revenue for dairy farmers and offer a new marketing avenue for beef seedstock producers. To qualify for the brand, calves must come from registered Holstein dams and be bred to a qualified SimAngus bull.

Trivia challenge
    Finland leads the world in per capita milk consumption. That answers our last trivia question. How much pizza is consumed in the U.S. each 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.