Trade enforcement is a priority

At the 100th annual Agricultural Outlook Forum, U.S. Trade Ambassador Katherine Tai briefly touched on trade breakthroughs, but spent more time on the enforcement of existing trade deals. The Mexican ban on biotech corn imports was at the top of that list. Tai also spoke about the market access concern for U.S. dairy products in Canada. “As trade representative and as a longtime trade negotiator and trade litigator, Canada dairy is personal for me,” Tai said. Tai went on to list the ongoing market access issues for U.S. dairy products in Canada dating back to the North American Free Trade Agreement.

More than 500,000 farms lost since 1981

Farm policy went through a noteworthy change in the 1970s. Rather than managing supply, the focus was put on maximizing productivity and exporting that production around the world. At the Agricultural Outlook Forum, U.S. Secretary of Agriculture Tom Vilsack shared a story about former U.S. Secretary of Agriculture Bob Bergland of Minnesota. When leaving the position in 1981, this Minnesotan voiced concerns about the societal impact of the sole focus on productivity. “He said we may lose farms, and when those farms are lost, we lose the farm families, and when those farm families are lost, we lose young people going to rural schools, and perhaps, that will have an impact on rural communities,” Vilsack said. Bergland’s prediction was realized with the U.S. losing over a half-million farmers since 1981. “You could take every farmer today in South Dakota and North Dakota, add them to every farmer in Minnesota and Wisconsin, every farmer in Illinois and Iowa, every farmer in Nebraska and Oklahoma, every farmer in Missouri and Colorado, and you’d have 536,000 farms,” Vilsack said. Vilsack said the Biden administration is focused on more new and better markets to give the farmer a bigger share of the food dollar.

Despite downturn, farmers remain in good financial position

Net farm income hit a high in 2022. It dropped off 26% this past year. Federal Reserve Bank of Kansas City Senior Vice President Nathan Kauffman said profits will also be thinner this year. “Despite this expected decline in farm income, I would argue many producers are still in a very, very strong financial position,” Kauffman said. “Much of this has to do with storing up working capital in these past couple of years when incomes were very strong. We interact a lot with bankers and lenders, and in our conversations last year, we would have banks tell us they would have no borrowers on a ‘watch’ list; that’s not common to have no borrowers on a ‘watch’ list as it relates to potential risk.” If farm income declines again in 2025 with a similar decline in working capital, Kauffman said agriculture will be in a situation very similar to the period between 2016-19. “We know those were not strong years in ag,” Kauffman said.

Judge upholds DNR authority for CAFO permitting

A Calumet County judge has ruled the Department of Natural Resources has the authority to require environmental permits for large-scale animal agriculture operations. The lawsuit was filed last year by the Wisconsin Manufacturers & Commerce representing the Wisconsin Dairy Alliance and Venture Dairy Cooperative. Clean Wisconsin attorney Evan Feinauer praised the decision saying, “Allowing large dairies to sidestep oversight would have been catastrophic for water protection in our state.”

Expanding trade

U.S. agriculture depends on market access and the development of new markets. “There are a number of different key markets that we should be focusing on,” said Matt Wohlman, vice president of government and industry relations, Land O’Lakes Inc. “Especially, as we look at the geopolitical shift that is going on, how do we build our relationship with markets that provide opportunities for our ag products, but are also aligned with our security agreements around the world as well.”

Immigration standoff

A bipartisan immigration bill failed earlier this month. American Business Immigration Coalition director of legislative affairs Jim O’Neill sees this as a critical issue for agriculture. A resolution to this issue is not expected anytime soon. “We’re two months into an election year, and that tends to be a time when people are very wary of taking up issues that they see are controversial, so I don’t think that there’s many opportunities in this Congress, especially with such tight margins with both chambers being controlled by different parties,” O’Neill said. “I don’t see a pathway in this Congress. However, we’d love for farmers to start reaching out to their elected officials now and making sure that they know that this needs to be top of mind so that when the new Congress is sworn in, we can hit the ground running and start working on legislation right away.” Agricultural groups are seeking H-2A reform and the ability to have a stable workforce.

Dwindling dairy heifer supplies

The number of dairy replacement heifers is at a 20-year low. According to a new report from the CoBank Knowledge Exchange, this situation could limit any meaningful growth in U.S. milk production. Due to tight numbers, dairy replacement prices are at an eight-year high. Despite that, heifer values have not kept pace with high production costs.

Supply, demand report released

According to the February USDA supply-demand report, 2024 milk production is expected to total 228.2 billion pounds, a decrease of 0.1 billion from the previous report. The prices for cheese, butter, nonfat dry milk and whey are all forecast to increase with strong domestic demand.

Dairy exports decline from record highs

USDA has released its 2023 agricultural export data. U.S. dairy export values declined $1.5 billion while volume dropped 7%. International Dairy Foods Association President and CEO Michael Dykes said this downturn underscores “a clear need for U.S. trade officials to focus on creating new, preferential market opportunities for American producers and food exporters while holding trade partners accountable to rules and agreements.”

Dairy consumption rises

In December 2023, domestic cheese consumption increased year-over-year. Consumption of American cheese rose 6.9 million pounds, and the other-than-American cheese consumption increased 15.2 million pounds. USDA reports butter consumption was up 43.6 million pounds from December 2022. Usage of dry whey was up 82,000 pounds while nonfat dry milk and skim milk powder together declined 14.9 million pounds.

Another term for FarmFirst officer team

The FarmFirst Dairy Cooperative board of directors has reelected its officer team. John Rettler, of Neosho, Wisconsin, will serve another term as president. Steve Brock, of Daggett, Michigan, is vice president. Stephanie Hughes, of Pittsville, Wisconsin, and Bob Dietzel, of East Dubuque, Illinois, were reelected as secretary and treasurer, respectively.

Brock takes food safety role at DATCP

Adam Brock has been named the new administrator of the food and recreational safety division for the Wisconsin Department of Agriculture, Trade and Consumer Protection. Most recently, Brock was the vice president of food safety, quality and regulatory compliance for Dairy Farmers of Wisconsin.

Trivia challenge

The pedal bone is the largest bone in a cow’s hoof. That answers our last trivia question. For this week’s trivia, how many slices of pizza does the average American eat every year? We will have the answer in our next edition of 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.