Economies of scale drive dairy decisions

The size of the average dairy herd is seeing consistent year-over-year growth, according to proprietary benchmarking reports from Farm Credit Services. Ag Country Farm Credit Services Agribusiness Vice President Kyle Froslie says cows are also staying in the herd longer. “People are growing their dairies and are looking more at maximizing the productive life of their cows,” Froslie said. “They might hang on to their dairy cows a little bit longer because they can get one more breeding into that animal, and even if the milk production drops off in that last lactation cycle, it still makes a lot of sense because of the beef income that’s coming from that calf.” More dairy replacement heifers are being sold for beef, and the cows in production are getting older. Despite that trend, milk production is rising, Froslie said, thanks to continued genetic improvement. “Dairy producers are not only getting more milk per animal but also better components.” The Farm Credit Services database includes 144 dairy sites across multiple states.

Milk production rising

Milk production in the 24 major dairy states rose 2.4% in May. In South Dakota, milk production is up more than 5%, and Minnesota gained 2.5%. South Dakota had 242,000 dairy cows milking in May, 12,000 more than one year ago. Minnesota has 451,000 head in the state herd, up 7,000 from a year ago.

A significant increase in cow numbers

The U.S. dairy industry continues to add cows to the herd. “The (U.S. Department of Agriculture milk production) report was brutal,” said Naomi Blohm, senior market advisor, Total Farm Marketing. “The report was bearish again with another 10,000 dairy cows added to the herd. The dairy herd has grown 99,000 head in the last five months; that is significant.” The dramatic increase in milk output has weighed on prices. “That’s just our reality right now.”

Thompson tackles ag labor challenge

House Agriculture Committee Chair Glenn “GT” Thompson has introduced an ag labor bill. Thompson said the modernization of the H-2A program is long overdue; “Congress has not updated the H-2A visa program since Ronald Reagan was president of the United States, and if you ask anyone who uses the program, they’ll say you can tell that.” Immigration issues are outside the jurisdiction of the House Agriculture Committee, but Thompson said action is needed. The proposal is designed to expand access to ag labor, control costs and streamline the overall process. Thompson’s bill has more than 40 original co-sponsors, and he expects widespread support for this legislation.

Ag labor bill delivers long-sought relief for dairy

National Milk Producers Federation President and CEO Gregg Doud was part of the Capitol Hill news briefing about a new ag labor bill. Doud emphasized that this issue is critically important to the dairy industry, which has never had access to the H-2A program. “I want to remind all of you that, on the Fourth of July, they’re going to be milking cows; on Christmas Day, they’re going to be milking cows, and without help, the cows don’t get milked, and when the cows don’t get milked, they go to town,” Doud said. “For the first time, this bill gets us there.”

High-quality hay will be more difficult to source

With this year’s drought affecting a large portion of the country, hay is in high demand. Scott Twardowski with Legacy Auction Company in Sauk Centre, Minnesota, is seeing the effects firsthand; “The last couple of months being dry, the market’s been quite a bit higher. We’ve seen the last couple of sales anywhere from $40 to $60 a ton higher on some hay. Hay is still available, but higher quality will come at a much higher price.” The hay for high-end markets, such as equine or dairy cattle, will be hard to find. “But there’ll be an abundance of grass hay or hay that’s had a little damage or something like that; there’ll be plenty of that. If you’re looking for grinding hay, I wouldn’t panic; we’ll have quite a bit of that stuff around.”

A tight timeline for the farm bill

Washington, D.C., analyst Jim Wiesemeyer believes it will be a tight fit to complete the farm bill soon. “Both the House and the Senate really don’t have that many congressional days left before the November third elections,” Wiesemeyer said. Even if the Senate Agriculture Committee advances the bill, lawmakers still face the difficult task of reconciling differences between the House and Senate versions. “The Senate is going to change the farm bill version from what the House had, especially on some controversial issues, Prop 12 and things like that. I’m not going to be surprised if we have a post-election, lame duck session of Congress where they could deal with the farm bill at that time.”

Dairy demand benefits from protein trend

Consumer interest in protein-rich foods continues to drive dairy demand, according to Land O’Lakes Dairy Foods President Heather Anfang. “Dairy is a terrific source of protein,” Anfang said. “As we see GLP-1s growing in usage in the United States and internationally, we expect this protein story to be long-lived. Dairy can really help people’s diets as they work toward new habits and new diets.” Anfang said cottage cheese is one of the category’s biggest success stories. “Cottage cheese is having a huge resurgence,” she said. “People are figuring out new ways to utilize cottage cheese, whether they’re blending it into smoothies or using it as a replacement in different recipes.” Butter and cheese demand continues at or near record levels, providing additional support for dairy farmers.

Soubra rejoins IDFA

Heather Soubra has rejoined the International Dairy Foods Association as senior vice president, strategic initiatives and industry relations. In this role, Soubra will lead the International Dairy Food Association’s NextGen Leadership Program. Soubra previously served as IDFA’s senior vice president of strategic initiatives and chief of staff. Most recently, Soubra served as director of the George Washington Leadership Institute at Mount Vernon, where she designed and facilitated leadership programming for leaders in government agencies, trade associations and other organizations.

NFU, MFU leader passes

The National Farmers Union and Minnesota Farmers Union mourn the passing of David Velde, a long-time Farmers Union leader and general counsel for both organizations. Velde, 74, of Alexandria, passed away June 26. Before taking on the role of NFU and MFU general counsel, Velde was the Minnesota Farmers Union director of public affairs. Velde is also a previous board member with the World Farmers Organization.

Trivia challenge

Teens should have three servings of dairy products per day. That answers our last trivia question. For this week’s trivia, when is National Ice Cream Day celebrated? We’ll have the answer in our next edition of the Dairy Star.

Don Wick is owner/broadcaster for the Red River Farm Network of 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 sons, Tony and Sam, and five grandchildren, Aiden, Piper, Adrienne, Aurora and Sterling.