Hearing scheduled for federal order reform

The U.S. Department of Agriculture has scheduled a national hearing to review Federal Milk Marketing Orders for Aug. 23 near Indianapolis, Indiana. Thirty proposals were submitted and 21 are in the scope of the hearing. Associated Milk Producers Inc. Chair Steve Schlangen said the numbers used in many of these proposals are still outdated. “They’re not anywhere close to where they should be as far as what it really costs to make milk into cheese and whey,” Schlangen said. “With the numbers we’re using right now to create a Class III price, the costs are from 2005. … Labor was $10 an hour then.” Schlangen also wants the farm bill to include mandatory reporting of production costs in the dairy plants and surveying every two years “so that this thing doesn’t get way out of line like it has been.”

$1B in losses from 2018 farm bill

The 2018 farm bill changed the way farmers are paid for Class I fluid milk, and the decision was made without a hearing, comment period or producer referendum. The Class I price now uses an average price, rather than the “higher of” pricing method. “We hope Congress is ready to make a simple four-word change in the dairy title of the 2023 farm bill,” said Laurie Fischer, CEO, American Dairy Coalition. “If the ‘higher of’ method was still in place, the August Class I mover would have been $18.29 (per hundredweight), not $16.62.” ADC reports the net loss realized by dairy farmers since the average method was implemented has now topped $1 billion. “Go back to the ‘higher of’ (pricing method) by the fastest means possible,” Fischer said.

Interest rates rise 

The Federal Reserve bumped interest rates by a quarter percentage point to a range of 5.25% to 5.5%. Interest rates are now at a 22-year high. Fed Chair Jerome Powell would not rule out another rate hike at the central bank’s September meeting.

Impact still to be seen 

Virginia Tech Professor Emeritus Dr. David Kohl spoke at the Bell Bank AgViews Live Conference in Fargo, North Dakota; Sioux Falls, South Dakota; and Wisconsin Dells, Wisconsin. “Navigating these interest rates is going to be very critical for the next two or three years; these are the fastest rising interest rates since the 1980s,” Kohl said. “We haven’t felt the impact because oftentimes we haven’t paid down on the operating loans.” Kohl said inflation, economic growth and unemployment are all factors that must be considered before interest rates can decline.

Milk production edges higher

Milk production in the 24 major dairy states totaled 18.1 billion pounds in June, up 0.2% from one year ago. Minnesota milk production rose 1.6% with the addition of 4,000 cows to the state herd in the past year. Wisconsin milk output was up 1% with cow numbers down 2,000 head. South Dakota milk production increased 6.9% with 13,000 cows added to production since June of last year. Milk production rose 2.5% in Iowa with 6,000 more cows.

Let the trend be your friend

Too many cows in the system, an oversupply of milk and milk dumping have all been market factors this summer. Total Farm Marketing senior marketing advisor Bryan Doherty said the milk price has improved. “When the market turns, the market will often find that sellers have got their solid position or shorts, and you have speculators already jumping on the long side,” he said. That brings additional volatility to the marketplace. Doherty said this is a time for dairy farmers to start hedging, “but, do it lightly (and) let the trend be your friend right now.”

Protecting farmers, consumers

USDA is partnering with attorneys general in 31 states to address anticompetitive market conditions in agriculture. The state attorneys general will now have additional authority to conduct investigations into price gouging, conflicts of interest and anticompetitive behavior in the food and agriculture sectors. Minnesota Attorney General Keith Ellison is part of this effort and said unfair markets in agriculture result in artificially high prices. The Minnesota AG’s Office is part of a lawsuit that claims Syngenta and Corteva exclude generic competitors with their customer loyalty programs.

ASPIRE Act addresses workforce shortages

Minnesota Sen. Tina Smith has introduced a bipartisan bill titled Agriculture Skills Preparation for Industry Recruitment Efforts Act. This proposal would address workforce shortages in the ag industry. “It creates a way to do work-based apprenticeships and hands-on training from working with other farmers, training in dairy management or meat processing,” Smith said. The ASPIRE Act would allow more people to enter into the agricultural industry and address other challenges like access to capital, rising farmland prices and operating loans.

A new option for haymakers

New Holland Agriculture North America has a new header for its Speedrower PLUS Series self-propelled windrowers. The new Durabine 413 PLUS disc header features a cut width of 13 feet. This gives haymakers an additional size to choose from in its Durabine Plus Series.

Minnesota dairy farmer joins Edge board

Brady Janzen, who is a partner with Riverview Dairy at Morris, Minnesota, will serve an interim term on the Edge Dairy Farmer Cooperative board. Janzen fills a vacancy left by Mitch Davis, who sold his Minnesota-based dairy farms and transitioned to an advisory role. Edge is based in Green Bay, Wisconsin, and serves dairy farmers in Illinois, Iowa, Kansas, Minnesota, Nebraska, Ohio, South Dakota and Wisconsin.

MAAE award winners named

The Minnesota Association of Agricultural Educators presented Doug Hanson of Willmar, Minnesota, with its Lifetime Achievement Award. Hanson is a former ag teacher at Willmar High School and coordinated the Minnesota FFA career development contests. Former Minnesota FFA advisor Joel Larson was recognized for Outstanding Service. The University of Minnesota-Crookston is the Outstanding Post Secondary/Adult Programs award winner. The Academy for Sciences and Agriculture charter school is the Outstanding Middle/Secondary Program. Eric Sawatzke of West Central Area Schools is the Outstanding Ag Education Teacher of the Year. Tori Barka of Kerkhoven-Murdock-Sundburg received the Early Career Teacher Award. Minnesota Farmers Union was honored for outstanding cooperation, and Compeer Financial was recognized with the Business and Industry Award.

Trivia challenge

National Ice Cream Day is celebrated on the third Sunday of July. That answers our last trivia question. For this week’s trivia, how many gallons of milk does the average American consume per year? We will have the answer in our 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.