USDA has announced details of its trade mitigation effort. This program includes $14.5 billion in assistance to farmers. “Dairy farmers are being paid at a rate of 20 cents per hundredweight,” said Chris Galen, Senior Vice President of Membership Services and Strategic Initiatives, National Milk Producers Federation. “That is up from the 12 cents per hundredweight payment rate that they got last year in the first round of the Market Facilitation Program.” Enrollment for MFP is underway at county Farm Service Agency offices. Sign-up is also available through September 20 for the new Dairy Margin Coverage program. “Dairy farmers can now go to their county FSA office and dip out of two wells; one being the DMC program and the other is the MFP program that was just announced in July.
 
Dairy farmers supported by MFP
    According to a study conducted by the American Farm Bureau Federation Market Intel, dairy farmers will share $351 to $371 million in Market Facilitation Program payments. That figure is based on the Trump Administration making all three tranches of payments. Crop producers will receive MFP payments based on a county rate, but there is a different formula for dairy and swine operations.

Strong DMC enrollment
    Minnesota Farm Service Agency State Executive Director Joe Martin calls enrollment in the Dairy Margin Coverage program strong. As of July 29, the state FSA office received 1,600 contracts. Martin thinks there could be another thousand dairies enroll before the September 20 deadline. “We’re already delivering payments, about $10 million in assistance to those producers who have signed up,” Martin said. “The vast majority, about 80%, are taking the five-year lock-in coverage at the maximum rate of 95% production at $9.50 in tier one. For the dairies that qualify for tier two, the majority are taking 95% production at the $4 coverage level.” There is an incentive for Minnesota dairies to sign up for the Dairy Margin Coverage program. “The Minnesota Legislature appropriated about $8 to $9 million in direct financial assistance. When farmers come to the FSA office, they’ll enroll in the program and we’ll provide the form for the state.”

Trade war ramps up
    President Donald Trump has promised to impose 10% tariffs on another $300 billion in Chinese goods and products. Trump said China has failed to ramp up its purchase of U.S. agricultural products, as promised. The new tariffs are scheduled to take effect September 1, a few days before another round of trade talks is scheduled to take place.

Milk production edges higher
    U.S. milk production is in a small growth pattern. In the 24 major dairy states, June milk production totaled more than 17 billion pounds, up just a fraction of one percent from last year. That fractional increase supports domestic price recovery. Decent prices could be seen into 2020, according to INTL FC Stone Senior Broker David Kurzawski. “We’ve had several years of rising fixed costs, amid lower milk prices. That’s made for tighter margins. Because of that, there’s lots of pressure on dairy farmers. They’ve done a good job of culling animals and unfortunately, closing some of their doors. That’s finally starting to work its way into the dairy markets.” Demand remains relatively strong across the board for U.S. dairy products. “If something really derailed demand, like a new wrinkle to the trade wars, that could potentially put a wrinkle in prices, but I think it’s behind us. We’re moving closer to better deals on trade.”    
 
New food trends could reinvigorate dairy sector
    According to a publication produced by Farmer Mac, the dairy industry continues to be burdened with an oversupply of milk. ‘The Feed’ predicts a shake-out will continue in the U.S. dairy industry until markets stabilize and supply and demand comes into balance. Farmer Mac did cite trends that could support the dairy sector. The trends include a focus on digestive wellness. Dairy products are one of the most common sources of probiotics, which is projected to be a $73 billion market by 2024. Another market tendency is toward flavor experimentation. Alcohol-infused ice cream, flavored butter and spicy international cheese are just a few examples.
 
A difficult haying season
    It has been a struggle for farmers to put up quality hay this summer as wet conditions persist. Based in the Brookings, S.D. area, WinField United alfalfa and forage specialist Jeff Jackson said small adjustments can be made to improve forage quality. One is to lay windrows as wide as possible. “It’s better to drive on the windrow than leave it in a narrow hay stack because there isn’t as much exposure to sunlight,” Jackson said. “Cut early in the day when the sun is shining to get it to dry as fast as possible. Also, cut a little taller, about three inches, so that alfalfa isn’t laying right on the wet dirt.” With the tight window to put up hay, Jackson said having a Plan B is a good idea. A bale wrapper for baleage or chopping for silage are both options.

Conaway: Not seeking reelection
    House Agriculture Committee Ranking Member Mike Conaway has announced he will not seek reelection in 2020. In a statement, Chairman Collin Peterson praised Conaway. Peterson said Conaway “has been a steadfast champion for America’s farmers and ranchers.” Peterson and Conaway are both CPAs and worked closely on the development of the current farm bill.

FCA names Smith as CEO/chairmen
    Glen Smith is succeeding Dallas Tonsager as the chairman and CEO of the Farm Credit Administration. Smith is an Iowa farmer who has served on the FCA board. Tonsager, who is a South Dakota native, passed away in May.

Davisco Foods founder passes
    Stan Davis, 100, passed away on July 27. Davis began his career as the manager and butter maker at a creamery in Frost, Minn. After a stint as a butter maker in Texas, Davis returned to Minnesota and a long career in the dairy business. Beginning with the purchase of the creamery in his home town of St. Peter, Davis continued to expand and innovate from the 1950s through the 1980s. In 1986, St. Peter Creamery, Le Sueur Cheese Company and Nicollet Food Products merged to form Davisco Foods International. Davisco Foods operates plants in Minnesota, South Dakota and Idaho and has sales offices worldwide.

A change in leadership for Dean Foods
    Dean Foods has named Eric Beringause as its new president and chief executive officer. Beringause succeeds Ralph Scozzafava, who had been on the job since 2015. Beringause has served as CEO of Gehl Foods. Dean Foods has not disclosed why Scozzafava resigned.

Elanco acquisition
    Elanco Animal Health has acquired a Canadian biotechnology firm called Prevtec Microbia. Prevtec Microbia develops vaccines to help prevent bacterial diseases in food animals. The deal was valued at $60 million.

Trivia challenge
    California leads the nation in the production of ice cream. That answers our last trivia question. On a per-capita basis, what state consumes the most pizza? 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.