Dairy farmers urged to embrace marketing opportunities

AgDairy marketing specialist Robin Schmahl expects Class III milk prices to remain steady with little change expected in milk production or consumer demand. “Higher demand probably isn’t going to happen because of the current economic situation, and it will take a while before milk production declines,” Schmahl said. “Dairy producers need to take a hard look at this market and when there are opportunities to protect prices, do some marketing or sign up for (Dairy Margin Coverage); they need to embrace those things.”
 
Change can happen in an instant
During a time of high commodity prices, rising land values and government payments, a percentage of farmers became complacent. Virginia Tech professor emeritus David Kohl made that point during the National Bankers Conference in Omaha, Nebraska. “You’re going to have a certain set of customers that are going to burn through working capital, liquidity and their equity, but you’re going to have another set of customers that will put profits on the table, build liquidity, build equity and they’re going to grow,” Kohl said. In this time of extreme volatility, Kohl said commodity prices could drop quickly. That makes it more important for farmers to know their breakeven costs and manage risk. The geopolitical environment can make changes in an instant. “Whether it’s China, the United States or the Federal Reserve, they’ll flip the switch and when change happens, it will happen very, very quickly,” he said.
 
Rail strike deadline moves to early December
The threat of a railroad strike is now off the table until Dec. 4 at the earliest. The previous strike deadline was Nov. 20. One of the major unions announced it was extending the status quo timeline to match another union. If either of the two largest unions are still voting, the deadline could be extended again. The Class I railroads reportedly planned to start shutting down service in anticipation of a work stoppage. The unions claimed the railroads are trying to cause panic and manipulate Congress to intervene.
 
US dairy leaders participate in COP27
A delegation led by U.S. Dairy Export Council President and CEO Krysta Harden and Dairy Management Inc. Chair Marilyn Hershey participated in the United Nations Climate Change Conference in Egypt. “We are proud of U.S. dairy producers’ progress and leadership thus far,” Harden said. “But, we know we can do more.” USDEC and DMI participated in forums on sustainable dairy production during the COP27 conference.
 
A change in perspective for the House Agriculture Committee
For the past two years, President Biden has been in the Oval Office and the Democrats had the majority in the House and Senate. Republicans took control of the House in the election. Public policy consultant and lobbyist James Callan said this scenario will influence the legislative agenda. “I think it will be difficult for the administration, if not impossible, to get anything major done.” If the Republicans win the majority in Congress, the chairmanship of the House Agriculture Committee would shift from current chairman David Scott of Georgia to G.T. Thompson of Pennsylvania. Callan believes Thompson would change the direction of the committee. “His priorities would be on dairy, forestry, nutrition from an oversight perspective and crop insurance,” Callan said. “Mr. Scott has focused on climate, racial equity and Southern commodities so I think there will be a significant difference in their approach and priorities.” Thompson has already discussed an ambitious timeline for the farm bill, completing the legislation before its expiration at the end of September. Callan leads a public policy firm in Washington, D.C. and represents Midwestern farm groups.
 
Vos reelected as speaker
Rep. Robin Vos, of Rochester, was reelected to serve as the speaker of the Wisconsin State Assembly for the 2023-24 legislative session. Vos is the longest serving speaker in state history. Rep. Kevin Petersen, of Waupaca, is speaker pro tempore and Rep. Tyler August, of Lake Geneva, is the majority leader.
 
Wisconsin dairy industry receives federal funds
Wisconsin will receive $7 million from U.S. Department of Agriculture’s Dairy Business Innovation Initiatives program. The funds will be used to increase milk processing capacity, making on-farm improvements and offering technical assistance. “As our dairy economy faces supply chain challenges, federal dollars will help Wisconsin dairy businesses to address those challenges,” Wisconsin Sen. Tammy Baldwin said.

DMC enrollment
Dairy farmers can enroll for 2023 Dairy Margin Coverage through Dec. 9. Last year, USDA took steps to improve coverage for small and medium-sized dairy farms. That includes the new Supplemental DMC program and an update to the feed cost formula.
 
UW-Oshkosh biogas project praised
In his report to the Board of Regents, University of Wisconsin System President Jay Rothman recognized University of Wisconsin-Oshkosh for its biogas program. UW-Oshkosh has partnered with Agra Energy, of Irvine, California, to break ground on Wisconsin’s first commercial facility to turn dairy manure into renewable fuel. The $20 million facility will use new technology to produce 750,000 gallons of renewable diesel and jet fuel annually.
 
Promoting food resilience
President Biden has signed a memorandum to strengthen the security of the U.S. food and agriculture system. This effort highlights the tools available to maintain food security, including the National Veterinary Stockpile, the Foot and Mouth Disease Vaccine Bank and the planned National Bio and Agro-Defense Facility.
 
Strong loan growth, credit quality for AgriBank
For the nine months ending Sept. 30, St. Paul-based AgriBank had net income of $576.1 million. That’s up from $558.7 million during the same period one year ago. Net interest income topped $621 million, an increase of 8% from last year. Total loans in the portfolio were at $129.6 billion, up more than 6%. The increase in AgriBank’s wholesale portfolio was driven primarily by agribusiness and real estate mortgage volume, partially offset by declines in production and intermediate term volume.

Trivia challenge
The youth wellness program created by the dairy checkoff and the National Football League is called Fuel Up to Play 60. That answers our last trivia question. For this week’s trivia, what country started the tradition of putting up a Christmas tree? 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.