Milk Prices - News & Analysis

A Conversation With Ag Secretary Rollins on Labor, Disease and MAHA

Thu, 13 Nov 2025 19:38:42 GMT

U.S. Secretary of Agriculture Brooke Rollins stuck to streamlining the federal government labor rules to alleviate dairy’s worker crisis and said more aggressive measures are coming to prevent and contain disease, in an interview with Dairy Herd Management. Rollins this week was at the joint annual meeting hosted by National Milk Producers Federation, the United Dairy Board and the United Dairy Industry Association in Arlington, Texas.

While there, she said the H-2A visa program is particularly broken for dairy, which requires year-round support instead of seasonal workers. She also said measures, such as mandatory testing for lactating dairy cattle prior to interstate movement, are not aggressive enough to address modern biosecurity threats.

Below is a summary of Dairy Herd’s 20-minute conversation with Rollins, who discussed labor, disease prevention as well as her feelings on the “Make America Healthy Again” movement.

What Federal Efforts Are in the Works to Ensure Adequate Labor for U.S. Dairies?

One of the central concerns among dairy producers, and the entire industry, is comprehensive immigration reform. To put it in perspective, more than two-thirds of today’s 9.36 million dairy cows are milked by immigrant laborers in the U.S., according to the National Milk Producers Federation.

Currently, the H-2A visa applies strictly to seasonal or temporary labor. Dairy operations, however, require consistent, skilled workers every day of the year. Milking and caring for cows, managing processing facilities and ensuring food safety are daily tasks that don’t pause between seasons. This mismatch leaves dairy farmers and processors nationwide without a legal means to fulfill their guestworker needs.

In addition to the need for year-round help, Secretary Rollins notes farmers must interact with three different federal agencies to use the H-2A program. Moreover, the costs associated with securing labor have significantly increased, with reports from farmers in south Texas indicating average hourly costs, including transportation and housing, reaching $30 to $35 per hour. Comparatively, similar labor across the border is $2 per hour, Rollins says, illustrating a system that is both unsustainable and inherently unfair.

Ideally, any H-2A program changes will reduce costs and red tape, but comprehensive solutions ultimately require congressional action.

In addition to visa programs, Secretary Rollins says the current administration remains focused on sealing borders and mass deportations.

“Everyone understands the dynamics of an open border, and the millions and millions, we’re unable to count how many, that crossed during the last administration. The President’s No. 1 promise as a candidate in 2022 through 2024 was sealing the border and mass deportations,” she says. “Looking at this challenge through the lens of understanding labor is absolute when we can’t feed ourselves, combined with where we are in terms of immigration, those are the nuances.”

How is the Administration Addressing Threats to Animal Ag?
On day 1, after being sworn in as Secretary of Ag, Rollins was briefed on HPAI . She made it clear that while some measures, such as mandatory testing for lactating dairy cattle prior to interstate movement , had been enacted, a broader and more aggressive approach is necessary. Recognizing that maintaining the status quo was insufficient, a comprehensive strategy was essential — not just from USDA but across the entire federal government.

“I realize there are lots of opinions on my boss, President Trump, but I think the one thing that most people would agree on is that he leaves it all in the field. And, that we have to do everything we can for this moment that we were given to fix a very broken system, whatever that system may look like, in this case, which is animal disease,” Rollins says.

In February 2025, the Trump administration set forth a five-point plan to combat HPAI . Rollins notes the dairy sector, in particular, showcased remarkable adaptability to HPAI threats, demonstrating industry resilience and proactive measures.

Significant investments, such as a $100 million innovation grant , have been allocated to explore vaccines and therapeutic solutions. However, the complexities of viral mutations necessitate caution, especially regarding vaccination strategies, to prevent potentially more dangerous strains from emerging.

“I think we’re going to make more progress than perhaps has been made. Having said that, it’s a virus and the virus always wins,” she says, noting they are worried about New World screwworm and took aggressive actions to combat that by closing several ports.

“We’ve not imported new animals, which is one of the reasons beef prices are up, but we are looking now to figure out how to start reopening ports. I think we’ve gotten our arms around exactly what the problem is,” she says. “We’re building out new sterile fly facilities, which is the only way we eradicated it 30 to 40 years ago, but we have a really good system in place.”

Rollins shares collaborations with international counterparts are stronger, creating an unprecedented partnership with Mexican authorities to manage and preempt future animal agriculture outbreaks effectively. Enhanced border protocols, including disinfection and ivermectin treatments for imports, underscore a commitment to protecting livestock health.

“I feel confident that we are aggressively attacking all pieces of NWS,” she says.

What Does the MAHA Movement’s Mean for Dairy?
The “Make America Healthy Again” movement aims to revamp the nation’s food system, and Rollins offers reassurance dairy products at the forefront.

“Health care costs too much. We’re not getting the care we need, especially to vulnerable populations. How do we fix that?” she asks. “Over the last year, it is completely flipped to, what are Americans eating? What are we serving in our schools? What are we serving in our SNAP program, which 42 million Americans are on the food stamp program.”

While the current economic situation is troubling, Rollins is confident in the long-term potential for profitability and sustainability in the dairy industry.

“What milk, cheese and other dairy products mean as we completely and fundamentally shift our entire food system is our dairy industry is at the very front tip of the spear,” she says, noting the response markets are answering and the dairy industry, too, with the $11 billion in new processing plants, U.S. dairy is riding a wave of momentum that is fueled by consumer demand.

“In the long term, I’m not sure there is an agriculture industry that has more to gain and that will see more of a pivot toward real profitability and real sustainability than this [dairy] industry. I could not be more excited to help lead on that,” she says.

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Navigating Uncertain Waters: The Impact of New Tariffs on U.S. Dairy Farmers

Tue, 04 Feb 2025 15:10:37 GMT

Amidst a backdrop of economic uncertainty, the dairy industry in the U.S. is about to embark on a challenging journey in 2025. The recent executive orders signed by President Trump have introduced significant tariffs on goods imported from key trading partners. With 25% tariffs on most goods from Mexico and Canada, and 10% on goods from China, the ramifications for U.S. dairy farmers could be profound.

Understanding the Impact of Tariffs
Charles Nicholson, an adjunct associate professor in the School of Integrative Plant Science at Cornell University, suggests that the combination of these new tariffs, alongside deportations and potential cuts in food and nutrition spending, could culminate in a staggering $6 billion loss in profits for U.S. dairy farmers over the next four years. Speaking at the 2025 Dyson Agricultural and Food Business Outlook conference, held January 17, Nicholson noted, “If you pick a trade fight with our major export destinations – Mexico, Canada and China – and they decide to retaliate, that has some substantive negative implications for dairy farms and processors.”

Importance of Key Export Markets
Mexico, Canada, and China are pivotal to the U.S. dairy export landscape, accounting collectively for over half of the nation’s dairy exports by value annually. History has shown us the risks associated with trade instability. For instance, retaliatory tariffs from China alone resulted in an approximate $2.6 billion in lost revenues for U.S. dairy farms from 2019 to 2021. This underscores the potential financial hazards that could lie ahead.

Market Reaction
The initial announcement sent ripples through the markets, with stakeholders bracing for retaliatory actions from Mexico, Canada, and China. However, a temporary delay in Mexico’s tariffs provided a brief reprieve. Canada, meanwhile, has already released a list of products subject to their own set of 25% tariffs, which include key dairy products like milk, cream, and butter. Mike North, president of Ever.Ag, shared that Monday’s trade was a little calmer as news broke of a delay to Mexico’s tariff following discussions between the countries’ leaders that saw a movement of Mexican troops to the border. Although he notes that these tariffs, especially on cream and butter, could greatly affect U.S. dairy prices, as Canada is a major export destination.

North says perhaps the bigger question that lingers is how long these measures remain in place.

“Predictably, this will add volatility to demand that may overshadow the ongoing focus around supply,” he says. “Only small changes can have large impacts on price. Producers are well advised to brace for the disruption that these tariffs will likely create.”

A Call for Diplomacy and Resolution
In light of these developments, Krysta Harden, the President and CEO of the U.S. Dairy Export Council, has issued a statement advocating for resolution through dialogue. Highlighting the announcement, she stated, “Yesterday President Trump signed three Executive Orders imposing 25% tariffs on most goods from Mexico and Canada and 10% tariffs on goods from China, all of which are set to go into effect on Tuesday, Feb. 4. The White House cited the ongoing flow of illicit drugs into the United States as the primary reason behind the imposition of tariffs. While this legitimate concern needs to be swiftly addressed, we urge discussions between all countries involved to resolve the issues in a manner that preserves the livelihoods of dairy farmers and manufacturers in rural America.”

The International Dairy Foods Association (IDFA) released the following statement in response to the tariffs:

“The U.S. dairy industry is watching closely as the President and his Administration leverage U.S. law and tariffs as a negotiating tool to strengthen America’s national security. We know the Administration understands that robust market access to Canada, Mexico, and China—our three largest trading partners—is critical to the future of U.S. dairy, and we remain hopeful that the President and his Administration do everything in their power to ensure the tariffs avoid unintended impacts on our dairy farmers and processors, including the potential for retaliatory tariffs on U.S. dairy exports. IDFA remains committed to working with the Trump Administration to expand trade opportunities for our industry, and we urge the Administration to continue proactive negotiations with our top trading partners to ensure dairy trade continues to grow.”

As the industry braces itself for a tumultuous road ahead, it is crucial for stakeholders across the board to engage in constructive dialogue and seek resolutions that protect the backbone of rural America – our dairy farmers. The repercussions of these international trade policies are significant, and the actions taken now will shape the landscape of the dairy industry for years to come.

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Midwest Dairy Producers Forced to Dump Milk

Fri, 04 Oct 2024 20:19:15 GMT

With much of the Upper Midwest processing capacity maxed out in terms of milk production, finding a new home for milk is not an easy task. Lucas Sjostrom, the executive director of Minnesota Milk shared that Hastings Creamery ability to discharge is shut down for 30 days, as they need to take their waste elsewhere. Sjostrom shares they are continuing operations and are accepting and diverting milk from the same farmers as needed.

“We’ve been working over the past few weeks with the farmers to find alternative markets while government officials have been looking to find a solution to keep the plant open,” he says. “We believe every milk buyer across the Upper Midwest is aware of the situation. Plants are already voluntarily dumping milk on-farm on certain days and even though we have transportation available, most plants cannot currently take the milk even for free.”

Hastings Creamery processes 150,000 lbs. of raw milk each day and purchases it from dairy farmers located in both Minnesota and Wisconsin. A variety of dairy products are under Hastings Creamery label, as well as some private labels for other companies and grocery store chains.

Justin Malone, one of the creamery’s owners, shared that it is a tough time in the dairy industry and some farmers are forced to dump milk because they can’t find any processing plants with the capacity to accept additional milk.

Other Farms Forced to Dump Milk, Too

The reality is that not only Hastings Creamery is impacted by an oversupply of milk on the market. Mitch Thompson owns and operates Thompson Family Dairy in Lewiston, Minn., and is a member-owner of Associated Milk Producers Inc. (AMPI). He shared that he had to dump milk from his herd on June 2.

“The milk hauler picked our milk up and said, ‘Well, I’m taking it to another farm’s field that just chopped rye to dump the milk in the field,’” he says, noting that he still will get paid for that dump milk, but shares the whole cooperative suffers when milk isn’t sold.

Thompson is uncertain on how long dumping milk will continue but shares that he is concerned about the current state of the dairy industry.

“We’re shipping around 70,000 lbs. of milk a day, so I worry where’s all that milk going to go,” he questions. “If they keep dumping the milk, how bad is our [milk] price going to get?”

At the time of the interview, Thompson shared that his farm’s milk was picked up and taken to the plant on June 5.

“It sounded like they were going to get a couple of other different farms and dump their milk like everybody’s taking their turn,” he shared.

Meanwhile, it’s normal business at Thompson Dairy, as cows must be milked every day. Even when the milk is then dumped into a nearby field.

“This is a real kick in the shorts. How long can you keep doing this when the milk price is so low already,” Thompson notes, sharing that he is concerned about the current situation of milk being dumped, as well as low milk prices.

“I just wonder when will things turn around,” he asks.

Flooded Milk Market

Sarah Schmidt, vice president of marketing with AMPI, says the reason producers are having to dump milk is simply because there is currently a flooded milk market.

“There is more milk on the market and fluid milk sales have declined dramatically, especially with schools closing for the summer,” she says. “Those fluid milk sales were there for the past several months and simply are not there now.”

Schmidt comments that milk from outside the Upper Midwest is pushing into the region and displacing typical, seasonal sales. She also notes all AMPI milk receiving plants are running at full capacity.

“The milk produced on member farms is exceeding our processing and marketing capacity,” she says. “The team is working hard to keep milk moving into processing facilities.”

Schmidt says unfortunately they do not see any specific signs as to when the tides are going to turn.

“What we do know is that dairy farmers produce a fantastic product and there is good demand for cheese and butter. I’m hopeful low cheese market prices make their way into the grocery stores, spurring increased sales,” she says.

Rural Bankers Share Top Concerns Index

Tue, 01 Aug 2023 15:51:18 GMT

The rural economy is slowly improving after being crashed by the COVID-19 pandemic in 2020. For the third time in the past four months, the Creighton University Rural Mainstreet Index (RMI) climbed above growth neutral.

For January 2021, the monthly survey of bank CEOs in a 10-state Midwest region sits at 52, which is up slightly from December’s 51.6.

The current reading is the second highest level since January 2020. The index ranges between 0 and 100 with a reading of 50 representing growth neutral.

“Recent sharp improvements in agriculture commodity prices, federal farm support payments and Federal Reserve’s record low short-term interest rates have underpinned the Rural Mainstreet Economy in a solid and positive growth range. However, the rural economy remains well below pre-pandemic levels,” says Ernie Goss, who chairs Creighton’s Heider College of Business and leads the RMI.

Bankers were asked their top concern for the economy in 2021. The results showed:

Excessive inflation and higher long-term interest rate.
A double-dip recession (W-shaped recover).
Trade restrictions and/or higher tariffs
Higher loan defaults and bankruptcies.

“I feel the economy is moving in a positive direction that can be rattled by a combination of higher taxes, higher inflation, and a return of stricter regulation,” shared Jim Levick, president of Nebraska State Bank in Oshkosh, Neb.

Farmland Values on the Rise

For a fourth straight month, the farmland price index advanced above growth neutral. The January reading climbed to 56.3, its highest level since July 2013. This is first time since 2013 the RMI has recorded four straight months of above growth neutral farmland prices.

“Farmland values in our general area are not on the decline as supported by recent auctions,” reports Jeff Bonnett, president of Havana National Bank in Havana, Ill.,

Bankers once again reported anemic loan volumes. The January loan volume index dropped to 33.9 from December’s 43.7, but up from November’s record low 25.8. The checking-deposit index soared to record high 88.0 from December’s 78.1, while the index for certificates of deposit, and other savings instruments increased to 46.0 from 42.2 in December.

“Approximately 44% of bank CEOs expect low loan demand to be the greatest issue facing their banks for 2021. This is up from 7% that recorded this as a top concern last year at this time,” Goss says. “One year ago, 32% of bankers indicated that rising loan defaults and bankruptcies were their greatest concern for 2020. This is significantly above the 4% of bankers that registered this as their greatest 2021 issue.”

However, 24% indicated that rising competition from untaxed credit unions and Farm Credit posed the greatest 2021 bank threat. This is well up from the 5% recorded last year at this time.

“We compete day-in-and-day-out with them and they simply have a 21% advantage that they can leverage over tax paying banks,” reports Joseph Anglin, senior vice president and chief financial officer at Pioneer Bank & Trust in Rapid City, S.D.

The confidence index, which reflects bank CEO expectations for the economy six months out, declined slightly to a still healthy 60 from December’s 62.9.

“Federal farm support payments, improving gain prices, and advancing exports have supported confidence offsetting negatives from pandemic ravaged retail and leisure and hospitality companies in rural areas,” Goss says.

This RMI, which started in 2005, represents an early snapshot of the economy of rural agricultural and energy-dependent portions of the nation. It focuses on 200 rural communities with an average population of 1,300.

One Year Later: New Jersey’s Largest Dairy Rebuilds After Being Leveled by Hurricane Ida

Thu, 03 Nov 2022 19:39:27 GMT

On September 1, 2021, cows were being milked and corn had just started getting chopped at Wellacrest Farms, the largest dairy in New Jersey. Around 6 p.m. that evening, as the cows were standing in line waiting their turn to get milked, a tornado touch down in Mullica Hills.

For three generations, Wellacrest Farms, owned by the Eachus family, has been in operation. The farm is home to 600 cows and an equal number of replacements. However, in 60 seconds a tornado spawned from the remnants of Hurricane Ida and completely devasted the family farm.

The Eachus family, who had all taken cover, walked out, shocked by the overwhelming destruction, and somehow through the grace of God, they were able to put one foot in front of the other and went to work.

Their chopper was wrecked, as was other equipment. Debris was all over. Cows were crying. Steel was ripped off barns, including their double-14 parallel parlor, but the actual milking units and wiring still were intact.

“It’s a miracle,” Marianne Eachus says.

A local company brought a generator, helping restore partial power and milking started back up around 1 a.m.

The cows were exhausted and so was the family, but once the generator restored power, the cows came through the parlor, one by one, until they were all milked.

“Everybody continued to get milked, fed and watered and taken care of,” Marianne says.

Earlier that day, Marianne’s husband and son headed to the field and began chopping corn. Only two loads were completed before the tornado came through.

“We didn’t get back to chopping until almost a month later,” Marianne says. “Everything was pushed back.”

A domino of pushbacks continued to this day.

“We had a later wheat crop and we had to hire someone to come and spray because our sprayer got demolished,” she says.

Supply chain headaches delayed getting equipment relocated and made finding supplies to rebuild a challenge. Marianne says that she and her family were already exhausted before the tornado ripped through.

“We had just come off of COVID-19, and thankfully we didn’t have to dump milk, but we were only getting paid for 85% of our milk,” she says. “We had two years of struggling and we had talked about downsizing.”

In addition to milking 600 cows, the Eachus family farms 2,000 acres of crops and owns a 500-acre hay farm in New York, along with custom farming.

“We’re very diversified and truthfully, that’s the only reason our farm made it through the pandemic,” Marianne says.

The Adrenaline Effect

When the sun peaked up the following morning, true devastation was revealed.

“We knew that cows were hurt, and my husband and I embraced, cried and then were like, ‘Where do we start?’” Marianne says.

The thought of rebuilding was so overwhelming, as it wasn’t like they just needed a roof and windows; 90% of the buildings were completely gone.

The farm was purchased in 1943 by Marianne’s husband, Ward’s family. The family milked cows and delivered milk from doorstep to doorstep. Ward is one of eight kids and many of his siblings have their own farms.

“Dairy is in our blood. My kids grew up here. My grandchildren are being raised here now,” Marianne says.

Donations began pouring in. People were walking down the lane to offer a lending hand or a case of water. A GoFundMe account raised more than $120,000, which later the Eachus family used to help rebuild their heifer barn.

“The outpour of help was overwhelming,” Marianne says.

In addition to food and water, big equipment, like excavators came in and more people, all willing to roll up their sleeves and help pick up the debris, came down the driveway.

Marianne says that she looked to her husband and said, “We have to move forward now.”

Learning that the largest dairy in New Jersey had been hit by a F1 tornado drew waves of people in.

“The outpour of help redeemed my faith in humanity,” Marianne says.

Still emotional talking about what unfolded more than a year ago, Marianne says the devastation that hit the family farm was like a death in the family.

“We hold onto all the great memories and somehow just move forward,” she says.

The total loss is estimated at $2 million, although the Eachus family is still battling with insurance companies today.

“It all had been an emotional financial struggle,” she says.

Community Support

The community support was widespread. Local restaurants donated food to ensure the family and all their employees were fed.

A few days after the tornado came through, a couple of Amish men stopped in and offered to volunteer their time to help with the rebuilding process. From a metal roof to hammering 2 x 4’s, installing windows, whatever they could do to help, they did. What they wouldn’t do was except pay. The only payment they would accept is having a meal provided. Which the local restaurants and families made sure the entire work crew – family, employees and those volunteering, including the Amish, were fed, day in and day-out.

“If I had to pay all that labor, I know we wouldn’t have been able to rebuild half of what we did,” Marianne says.

As promised, for 10 weeks the Amish work crew showed up, rolled up their sleeves and worked. Somedays it was a handful, other days, nearly 25. Their ages ranged from 14 to gentlemen in their 70s.

“What one crew started, the next crew came in and just started up where they left off,” Marianne says. “They were amazing help.”

The destruction was massive. Four harvesters were blown down. 45 cows died. And, so much more. Harvest continued until December. Their combine was destroyed, and the fields were covered with debris.

Despite the massive blow Wellacrest Farms experienced, the Eachus family feels blessed. With three generations on the farm today, Marianne says she hopes that her grandchildren will want to continue the family farm someday.

“The farm is in better shape than it has been in probably the last 10 years,” she says.

“Everything the color blue on our farm is a sign of rebuilding that happened from the farm. Which was a lot,” she shares.

Wellacrest Farms’ feed company offered a 0%, $100,000 loan, to serve as a line of credit, to begin the rebuilding process. Factor in the GoFundMe, and all the cash donations, and the Eachus family feels blessed for the outpouring of support.

Marianne says it’s hard for her to watch the news on television with all the devastation that Hurricane Ivan brought to Florida this fall.

“It’s just too hard,” she says. “It brings back all that we have gone through.”

Her 5-year-old grandson gets hysterical when weather alerts come across the television.

“He’s a tough guy, but as soon as it starts to get a dark cloud, he begins to cry,” she says.

The tornado has affected the entire family, but more than anything, it has made them feel grateful.

“I wish I could write a thank you note to every single person who offered help in any shape or form,” Marianne says.

Letters from California to Florida and everywhere in-between came, but one letter that came from an older gentleman in a nursing home still sticks with Marianne a year later.

“He wrote me a beautiful letter, saying his grandparents had a dairy farm when he was younger and they had to take the milk and put it in the cans and take it to the dump station with his father,” she said crying. “He sent me $20 and that was what meant the most to me.”

Resilient, a year later the Eachus family, their herd of cows and their employees all have been through so much. They’re thankful for the outpouring of support from their community to help them rebuild. Without them, Marianne says she doesn’t know how her family would have rebuilt.

“Everyone helping us out gave us strength to take it one day at a time,” Marianne says.

Butter Makers Struggle to Keep Pace with Demand

Thu, 06 Jan 2022 19:06:45 GMT

U.S. butter prices hit a four-year high the last week of December and have continued to climb. CME spot butter prices are up 73 cents since December 1, closing January 5 at $2.71/lb. Betty Berning, analsyst with the Daily Dairy Report notes that several factors have combined to push spot butter prices to levels not seen since 2017.

“Contributing factors to this run-up in prices include tightening milk supplies, increased milk demand from other processors, especially cheesemakers, strong butter exports and domestic holiday demand, and ongoing supply chain congestion,” Berning said.

U.S. milk production began to decline in November 2021 on a year-over-year basis as cow numbers also dropped. Two regions, the Southwest and Pacific Northwest, where butter production is heavy also reported declining milk output.

“As milk production falls, churns often lose out because fewer spot loads are available, and those that are carry a premium,” Berning said. “November 2021 butter stocks also dwindled, indicating that butter moved out of storage when manufacturers couldn’t make enough butter to keep up with demand.”

Throughout December, Dairy Market News reported that labor shortages were also a problem for butter makers, which were running below capacity. In addition, the ongoing truck driver shortage caused shipments of cream to be delayed, particularly loads of extra cream that tpically move eastward from the West Coast. Lack of staff also contributed to a cream cheese shortage during the holiday baking and entertaining season.

“Strong Class II demand for high-fat holiday treats, such as ice cream, eggnog, and whipping cream, also pulled milk away from butter production,” Berning noted. “At the same time supply was tightening, butter demand was strong.”

According to the most recent trade data from USDA, November butter exports of more than 7.3 million pounds were up nearly 143% from November 2020 and up 125% year to date through November. However, the United States also imported nearly 9.5 million pounds of butter in November. Exports likely remained strong through the end of the year; DMN reported that butter manufacturers cited strong exports in December. Domestically, November and December tend to be strong months for butter use due to the holiday season, and andecotal reports suggest seasonal demand this year was typical, Berning noted.

“Tightening cream and butter supplies along with unfaltering demand have already caused prices to jump precipitously and should continue to support prices moving forward,” Berning said.

As Dairies Dump Milk, Frustration Mounts Over Retail Buying Limits

Sat, 30 Jan 2021 16:06:46 GMT

From Georgia to Pennsylvania, videos like this are flooding social media. Dairy producers are facing a devastating scenario and being forced to dump milk down the drain . For some dairy farmers, this marks a first.

“This is the first time in the 32 years I’ve been in business that we’ve had to dump milk in the fields,” says Arnie VanDieden, a dairy producer in Texas.

The Texas producer isn’t alone. Paul Hartman in Reading, Penn. has also been in the business more than 30 years and faced a similar scenario earlier this week.

“Our dairy processor told us on Monday,” says Hartman. “They gave a letter that the driver dropped off that said they were supposed to dump our milk for the next two days; they weren’t going to pick it up. Right away when we heard it, we were shocked. All we hear is the milk is in demand, the stores are having trouble getting it, and then all of a sudden, they’re asking us to dump our milk. So that was kind of confusing.”

The Sudden Loss of Demand

Hartman’s processor told him the reason is a backup in demand. As COVID-19 hit, and industries like restaurants and food services saw an abrupt halt I business, the crisis started to unfold.

“We don’t have an outlet for this milk,” explains Scott Brown, economist with the University of Missouri . “Even if we have plants able to try to process that milk, there’s a little reason to do it at this point due to lack of demand.”

From high-end restaurants to fast food chains, fewer people are eating out and instead, staying at home due to stay-at-home orders. In turn, those consumers are eating fewer pounds of key items like butter and cheese. Therefore, a portion of the nation’s milk supply is without a home.

“The decline in the food service business has not been offset by the increase in the retail side of business,” says Michael Dykes, president and CEO of International Dairy Foods Association (IDFA) . “Overnight, we saw a paradigm shift and the business turned upside down.”

The lack of demand from the food service industry is so severe, it’s overshadowing the increase in demand at local grocery stores.

“We don’t have the data yet but will likely post record high and fluid milk consumption in the first quarter of 2020,” says Anna-Lisa Laca, editor of Farm Journal’s MILK. “Unfortunately, that’s not being offset by restaurant demand, and it’s not being offset by our lack of ability to export dairy products in a meaningful way at the moment.”

10% of U.S. Milk Without a Home

IDFA says with fewer restaurants and food services open for normal business, IDFA estimates 10% of the nation’s milk supply is without a home for the foreseeable future.

“That is staggering,” says Dykes. “I think the reason why you’re seeing the reports of dumped milk. This has happened so quickly that the markets can’t adjust.”

Finding a New Home for Lost Demand

Dykes says with the loss of essential demand, IDFA and other dairy groups are lobbying for dairy to be distributed to those who need it most, utilizing current government food programs, especially as unemployment rates grow to levels the U.S. hasn’t seen in nearly 100 years.

“We need to make sure that America’s food banks are replenished,” says Dykes. “When we look at what they’re suggesting, foods banks are buying 10 times as much food as they were on a six-month basis, from $50,000 to $500,000. They’re estimating they need $1.4 billion of food . So, we need to work with the U.S. Department of Agriculture to make sure that food in the food banks is there. Our industry has it, and Americans needed it.”

Dairy Groups Lobby for Programs to Help

While Dykes is in favor of government buying for both domestic and international food aid programs, he doesn’t want to see the government implement a program that artificially boosts prices short-term, acting as a wet blanket on the market later on.

“We don’t want to take actions today that put an overhang in the market,” says Dykes. “We don’t want to suffer the consequences for the next three years, so that we go through another three years like we just went through the last four or five years. Those kinds of programs may sound good on the surface, and we like it when someone’s buying, i.e. the government, but we don’t like it when the government holds on to it for a long time, and then when they start selling, it depresses the market for years.”

Short-Term Pain

While buying for food banks could help dairy find a new home for now, milk futures continue to be in a tailspin. Muted milk prices are putting immense financial pressure on dairy producers.

“We have to take this first 60 to 90 day window, which to me is going to be the toughest and the hardest to survive, and we need to think about the programs that can get money in producers’ pockets or get help and producers pockets as quickly as possible,” says Brown.

The Milk Supply is There

As short-term financial frustrations mount, Hartman and other producers are also frustrated with what they are seeing at some grocery stores. As they are dumping dairy down the drain, some retailers are limiting the amount of milk a shopper can buy during a time when the supply is there, and dairy leaders say logistics are working.

“If they’re being asked grocery store to only take one gallon of milk, I would get after the grocery store and say, ‘why am I allowed to get one gallon when dairy farmers are dumping milk,’” says Hartman. “Let’s take off those restrictions and let people buy as much milk as they can.”

Dykes agrees with urging retailers to remove restrictions on dairy. He says the supply is there and limits on buying aren’t necessary.

“Our members are getting the milk to the grocers,” says Dykes. “The milk is there. We need to remove those signs at any grocery store. There should be no limits on how much milk or any dairy product any consumer can purchase. It is available. Our members are getting it there, and our members are processing the milk.”

Dykes says the supply is there, as processors and food companies are going the extra mile to ensure dairy isn’t missing from refrigerators at any retail location. With COVID-19, he says that is no easy task.

“Our members are going above and beyond to make the make the product available,” says Dykes. “For example, if they weren’t doing three shifts a day, many of them have gone to three shifts, they’ve extended the hours and they are they’re maximizing the output through the plants, all the while preserving food safety. Our members are going above and beyond to make sure that the supply chain is has the product in it for the consumers.”

Mike North of Vault Ag thinks the panic buying has started to soften and agrees the limits on dairy should also disappear.

“I think the first couple days milk was like toilet paper, it went off the shelf and nobody could find anything anywhere,” says North. “Now that we have caught up to that, that is no longer the case and that sign can go away and should go away. Let’s face it; if somebody wants to walk in and buy three or four gallons of milk, let them do it, because on the other side of this, we are dumping milk and the reality is our processors are running around the clock right now doing everything they can to keep up with the demand where there is demand. And it’s for the retail space, and that is in the form of a gallon of milk. Take that sign down because the producer the producers are ready to put that on the shelf.”

Waning Outlooks

As those in the dairy industry lobby for more demand or financial help in other ways, outlooks from farmers are waning.

“At first, it looked like 2020 was going to be a pretty good year, and man did that turn on a dime,” says Hartman.

VanDieden says their family is cutting back on inputs, to try to feed their cows a little cheaper during this tough time. He and other producers are in survival mode, hoping better days for dairying are ahead.

“Since we are shortcutting supply, I believe on the backside of this it does start to open some doors for us to see some better prices,” says North. “Maybe 2020 finishes a lot better than it looks today; cross your fingers”

USDA Announces CFAP2 Details

Wed, 11 Nov 2020 05:23:07 GMT

USDA Under Secretary for Farm Production and Conservation will discuss details of the second round of the Coronavirus Food Assistance Program this morning on AgriTalk. Listen live at 10:18 a.m. Central.

USDA Press Release:

USDA to Provide Additional Direct Assistance to Farmers and Ranchers Impacted by the Coronavirus

Expansion of the Coronavirus Food Assistance Program Begins Sept. 21

(Washington, D.C., September 18, 2020) – President Donald J. Trump and U.S. Secretary of Agriculture Sonny Perdue today announced up to an additional $14 billion dollars for agricultural producers who continue to face market disruptions and associated costs because of COVID-19. Signup for the Coronavirus Food Assistance Program (CFAP 2) will begin September 21st and run through December 11, 2020.

“America’s agriculture communities are resilient, but still face many challenges due to the COVID-19 pandemic. President Trump is once again demonstrating his commitment to ensure America’s farmers and ranchers remain in business to produce the food, fuel, and fiber America needs to thrive,” said Secretary Perdue. “We listened to feedback received from farmers, ranchers and agricultural organizations about the impact of the pandemic on our nations’ farms and ranches, and we developed a program to better meet the needs of those impacted.”

Background:

The U.S. Department of Agriculture (USDA) will use funds being made available from the Commodity Credit Corporation (CCC) Charter Act and CARES Act to support row crops, livestock, specialty crops, dairy, aquaculture and many additional commodities. USDA has incorporated improvements in CFAP 2 based from stakeholder engagement and public feedback to better meet the needs of impacted farmers and ranchers.

Producers can apply for CFAP 2 at USDA’s Farm Service Agency (FSA) county offices. This program provides financial assistance that gives producers the ability to absorb increased marketing costs associated with the COVID-19 pandemic. Producers will be compensated for ongoing market disruptions and assisted with the associated marketing costs.

CFAP 2 payments will be made for three categories of commodities – Price Trigger Commodities, Flat-rate Crops and Sales Commodities.

Price Trigger Commodities

Price trigger commodities are major commodities that meet a minimum 5-percent price decline over a specified period of time. Eligible price trigger crops include barley, corn, sorghum, soybeans, sunflowers, upland cotton, and all classes of wheat. Payments will be based on 2020 planted acres of the crop, excluding prevented planting and experimental acres. Payments for price trigger crops will be the greater of: 1) the eligible acres multiplied by a payment rate of $15 per acre; or 2) the eligible acres multiplied by a nationwide crop marketing percentage, multiplied by a crop-specific payment rate, and then by the producer’s weighted 2020 Actual Production History (APH) approved yield. If the APH is not available, 85 percent of the 2019 Agriculture Risk Coverage-County Option (ARC-CO) benchmark yield for that crop will be used.

For broilers and eggs, payments will be based on 75 percent of the producers’ 2019 production.

Dairy (cow’s milk) payments will be based on actual milk production from April 1 to Aug. 31, 2020. The milk production for Sept. 1, 2020, to Dec. 31, 2020, will be estimated by FSA.

Eligible beef cattle, hogs and pigs, and lambs and sheep payments will be based on the maximum owned inventory of eligible livestock, excluding breeding stock, on a date selected by the producer, between Apr. 16, 2020, and Aug. 31, 2020.

Flat-rate Crops

Crops that either do not meet the 5-percent price decline trigger or do not have data available to calculate a price change will have payments calculated based on eligible 2020 acres multiplied by $15 per acre. These crops include alfalfa, extra long staple (ELS) cotton, oats, peanuts, rice, hemp, millet, mustard, safflower, sesame, triticale, rapeseed, and several others.

Sales Commodities

Sales commodities include specialty crops; aquaculture; nursery crops and floriculture; other commodities not included in the price trigger and flat-rate categories, including tobacco; goat milk; mink (including pelts); mohair; wool; and other livestock (excluding breeding stock) not included under the price trigger category that were grown for food, fiber, fur, or feathers. Payment calculations will use a sales-based approach, where producers are paid based on five payment gradations associated with their 2019 sales.

Additional commodities are eligible in CFAP 2 that weren’t eligible in the first iteration of the program. If your agricultural operation has been impacted by the pandemic since April 2020, we encourage you to apply for CFAP 2. A complete list of eligible commodities, payment rates and calculations can be found on farmers.gov/cfap .

Eligibility

There is a payment limitation of $250,000 per person or entity for all commodities combined. Applicants who are corporations, limited liability companies, limited partnerships may qualify for additional payment limits when members actively provide personal labor or personal management for the farming operation. In addition, this special payment limitation provision has been expanded to include trusts and estates for both CFAP 1 and 2.

Producers will also have to certify they meet the Adjusted Gross Income limitation of $900,000 unless at least 75 percent or more of their income is derived from farming, ranching or forestry-related activities. Producers must also be in compliance with Highly Erodible Land and Wetland Conservation provisions.

Applying for Assistance

Producers can apply for assistance beginning Sept. 21, 2020. Applications will be accepted through Dec. 11, 2020.

Additional information and application forms can be found at farmers.gov/cfap . Documentation to support the producer’s application and certification may be requested. All other eligibility forms, such as those related to adjusted gross income and payment information, can be downloaded from farmers.gov/cfap/apply . For existing FSA customers, including those who participated in CFAP 1, many documents are likely already on file. Producers should check with FSA county office to see if any of the forms need to be updated.

Customers seeking one-on-one support with the CFAP 2 application process can call 877-508-8364 to speak directly with a USDA employee ready to offer assistance. This is a recommended first step before a producer engages with the team at the FSA county office.

All USDA Service Centers are open for business, including some that are open to visitors to conduct business in person by appointment only. All Service Center visitors wishing to conduct business with FSA, Natural Resources Conservation Service or any other Service Center agency should call ahead and schedule an appointment. Service Centers that are open for appointments will pre-screen visitors based on health concerns or recent travel, and visitors must adhere to social distancing guidelines. Visitors are also required to wear a face covering during their appointment. Our program delivery staff will be in the office, and they will be working with our producers in the office, by phone and using online tools. More information can be found at farmers.gov/coronavirus .

MFP 2019: Payments Range From $15 to $150 Per Acre

Wed, 11 Nov 2020 05:05:28 GMT

USDA shed some light on the 2019 Market Facilitation Program (MFP) Thursday. After months of uncertainty and murky details, the agency announced per acre payments will vary by county but will range from $15 to $150.

Payments will be made by the Farm Service Agency (FSA) under the authority of the Commodity Credit Corporation (CCC) Charter Act to producers of alfalfa hay, barley, canola, corn, crambe, dried beans, dry peas, extra-long staple cotton, flaxseed, lentils, long grain and medium grain rice, millet, mustard seed, oats, peanuts, rapeseed, rye, safflower, sesame seed, small and large chickpeas, sorghum, soybeans, sunflower seed, temperate japonica rice, triticale, upland cotton, and wheat.

MFP assistance for those non-specialty crops is based on a single county payment rate multiplied by a farm’s total plantings of MFP-eligible crops in aggregate in 2019. County payment rates range from $15 to $150 per acre, depending on the impact of unjustified trade retaliation in that county. See a full list of county rates here . A producer’s total payment-eligible plantings cannot exceed total 2018 plantings.

Acreage of non-specialty crops and cover crops must be planted by August 1, 2019 to be considered eligible for MFP payments.

Dairy & Hogs

Dairy producers who were in business as of June 1, 2019, will receive a $0.20 per hundredweight payment on production history, and hog producers will receive an $11 per head payment based on the number of live hogs owned on a day selected by the producer between April 1 and May 15, 2019.

Sign Up & Eligibility Details

MFP signup at local FSA offices will run from Monday, July 29 through Friday, December 6, 2019.

MFP payments will be made in up to three waves, with the second and third tranches evaluated as market conditions and trade opportunities dictate. The first tranche will be comprised of the higher of either 50% of a producer’s calculated payment or $15 per acre, which may reduce potential payments to be made in tranches two or three. USDA will begin making first tranche payments in mid-to-late August.

MFP payments are limited to a combined $250,000 for non-specialty crops per person or legal entity. MFP payments are also limited to a combined $250,000 for dairy and hog producers and a combined $250,000 for specialty crop producers. However, no applicant can receive more than $500,000.

The AGI limits are slightly different this year. Eligible applicants must also have an average adjusted gross income (AGI) for tax years 2014, 2015, and 2016 of less than $900,000 or, 75% of the person’s or legal entity’s average AGI for tax years 2014, 2015, and 2016 must have been derived from farming and ranching.

As usual, applicants must also comply with the provisions of the Highly Erodible Land and Wetland Conservation regulations.

If conditions warrant, the second and third tranches will be made in November and early January, respectively.

“China and other nations have not played by the rules for a long time, and President Trump is the first President to stand up to them and send a clear message that the United States will no longer tolerate unfair trade practices,” Secretary Perdue said. “The details we announced today ensure farmers will not stand alone in facing unjustified retaliatory tariffs while President Trump continues working to solidify better and stronger trade deals around the globe.”