Dairy

Disaster Bill Could Make Passing the Farm Bill Easier

Round one of the farm bill battles could be settled as soon as this month if the Senate agrees on a fix for cotton and dairy in the $81 billion disaster aid bill already passed by the House. Not only would a cotton and dairy plan settle one of the most contentious negotiations of a new farm bill, it would also increase the baseline funding available for the new five-year bill. ProFarmer Washington policy analyst Jim Wiesemeyer says that would make finishing the Farm Bill "easier, but not easy." The $81 billion disaster aid package contains a provision that would make cotton growers eligible for a commodity price support program under Title 1 of the Farm Bill. In addition, the language makes growers eligible for the Price Loss Coverage (PLC) program and removes the $20 million cap on the Livestock Gross Margin program for dairy. "If they get the [safety net] changes in the disaster bill, they get a funding baseline right away," Wiesemeyer explains. "Then that will carry over when they start the Farm Bill debate. They won't have to find as much money." Sen. Jerry Moran (R-KS) says the bill will reduce fighting among different sectors of agriculture by increasing the amount of money available to fund the Farm Bill. "While the spending amounts will still be challenging it means there will be less of trying to take money out of one thing that's important to agriculture to pay for something else that's important to agriculture," he says. Sen. Debbie Stabenow (D-MI) says the House bill missed an important opportunity to repair "the broken dairy safety net." "Expanding insurance options for dairy farmers is a good first step - but there's more we can do to help our producers recover from tough economic times and lay the groundwork for further progress in the 2018 Farm Bill," she said in a statement. "As the Senate completes its work on the disaster package, I will continue to support the Margin Protection Program improvements that Senators Cochran and Leahy made in the Senate Agriculture Appropriations Bill." During his address to the American Farm Bureau Federation national convention attendees, President Trump said he was "looking forward to working with Congress to pass the farm bill on time, so that it delivers for all of you." Only time will tell if Congress is in fact able to pass a new Farm Bill in 2018.
Read more...

Regional Economics to Influence Hay Prices Most

For many livestock species, alfalfa is a critical component of the diet. As we look to 2018, national hay prices aren’t expected to soar, but look for regional economics to play a heavy role in the price you pay at the farm gate. Rising highway costs are making the expense of delivering hay more of a consideration, which is resulting in very regionalized hay prices, according to Dan Undersander, a member of the University of Wisconsin Madison forage team. The latest Agricultural Prices Report from USDA shows the national average price for alfalfa was $152 per ton in October. While it’s important to note that price is representative of all quality levels, let’s compare it to the average price in several states: $185/ton in California, $205/ton in Kentucky, $219/ ton in New York and $215/ton in Tennessee. What causes these price differences? Undersander says it is a combination of regional economics and location. The Midwest Despite a rough start to the 2017 hay season, alfalfa stocks in the Midwest are doing ok. “We had bad hay making conditions on the first cutting,” Undersander says. “On the other hand, we had pretty good tonnage the rest of the season. That will tend to keep prices pretty stable throughout the winter season.” A growing dairy herd in the region is expected to support demand and prices. UW Madison Forages reported high quality dairy hay sold for an average of $190 per ton the week of December 3. The South Many southern states are experiencing drought. As a result, more hay is being fed to livestock because there isn’t forage to graze. Undersander says that’s eating into their hay supply. “The region in the south is a one state area,” Undersander explains. “Because they are buying lower quality they can’t afford to haul it very far.” Low stocks and burgeoning demand are driving prices higher. The Northeast Evidenced by the $219/ton average alfalfa price USDA is reporting in New York, hay prices in the Northeast were driven higher by drought in 2017. As a result they are going to be down on supplies. To make problems worse, the region is too far from commercial hay growing regions that might have an abundance of hay to make hauling in hay very profitable, Undersander explains. Instead, he says dairy farmers there will start replacing hay with corn silage as they did in California when hay prices there started to skyrocket in 2016. The West In California, the number of milk cows in the state is declining while alfalfa exports are soaring. “January through September 2017 alfalfa hay exports from the west coast to China were 13% higher than the same period in 2016,” says Seth Hoyt, a hay market expert and author of the Hoyt Report. In addition to China, there are growing markets in Japan, Saudi Arabia and UAE that are soaking up alfalfa hay from California. As a result, Hoyt says early indications are that there won’t be much excess hay carried into 2018 in the West. “Much will depend on winter weather, particularly in higher elevation states where there was very heavy feeding of feeder hay to beef cattle last winter,” he says. “If we have similar weather again this winter, it would be expected that hay carryover would be down as it was on May 1, 2017.” Hoyt says it’s nearly impossible to predict hay prices in the West given the multitude of emerging price factors, but he anticipates the spread between dairy quality hay and lower quality hay to widen. “There are quite a few dairies in central California that are carrying smaller than normal inventories of hay and will have light supplies of higher quality alfalfa hay on hand as we go into early next season,” Hoyt explains. “I believe the spread between the top and bottom of the alfalfa hay market will be wide, especially in central California where many dairies will feed by-product feeds to dry cows and less alfalfa hay if the price on fair quality dry cow hay is above $190-$200 delivered.”
Read more...

USDA Cracks Down On Organic Fraud

Imagine slapping an organic label on anything you want - food, drink, etc. You'd do none of the extra work, but be able to charge consumers a hefty premium for the label. It's dishonest and not fair to the operations that put in the extra hours to become certified organic and USDA is dedicating efforts to stop this type of fraud. This week two more companies were added to the list of frauds: Cloud Vaping Industries (U.S.) and Viet Nam Agricultural Biotechnology Joint Stock Company (Vietnam). "Using fraudulent documents to market, label or sell non-organic agricultural products as organic is punishable by fines of up to $11,000 for each violation," according to USDA. Right now USDA has identified more than 90 companies fraudulently marketing their products as organic. Frauds essentially copy the form that certifies real organic companies to convince consumers they're up to snuff without doing any of the real work. When fraudulent companies do this they use the information of certifying agents”in many cases without their consent. USDA encourages legal organic operations and certifying agents to be on guard for fraud and report any suspected cases to the NOP compliant and enforcement division. This USDA division closely monitors not only domestic, but foreign suppliers as well to ensure anything labeled organic meets U.S. specifications. USDA requires organic certifiers to "evaluate each organic operation's Organic System Plan, verify an operation's compliance with record keeping requirements and conduct annual on-site inspections." Organic operations must keep records regarding production, harvesting and handling any product. Imported products must keep a full audit trail back to the last operation that produced, processed or packaged the product to show regulatory compliance.
Read more...

Here Is What Farmers Say About Keeping NAFTA

Since his campaign days, President Donald Trump has voiced little support for keeping the United States involved in the North American Free Trade Agreement (NAFTA). Ag trade groups, companies and associations have varying perspectives and positions on the topic as well. Last week, U.S. farmers, dairymen and livestock producers weighed in to share their points of view, via a Farm Journal Pulse survey. The survey question asked was, “Do you think the U.S. should withdraw from NAFTA?” Of the 839 responses, 30% said yes, to eliminate it either because they believe the economy is better off without the trade agreement, or because they believe the U.S. can negotiate better deals with Canada and Mexico one-on-one. Forty-three percent of respondents said to keep NAFTA, because it is crucial for farmers and for maintaining a low-cost food supply. Slightly more than one-fourth of Pulse participants, 26%, said they aren’t sure whether keeping or eliminating NAFTA is in the United States’ best interest. The map below depicts the 839 responses, which are provided anonymously, to the question. The dots are color-coded based on the answer provided. Farm Journal partners with Commodity Update, the leading provider of agricultural information to mobile phones, to implement the Pulse survey, which is done twice per month.
Read more...

Will China's Appetite for Cheese Boost Milk Prices?

Last month Chinese officials announced they were lowing import tariffs on certain types of cheese. That’s great news for the dairy markets and will likely lead to an increase in cheese exports. However, while it will help, China’s demand for cheese is not likely going to be enough to compensate for the massive supply of milk and dairy products in the U.S. ”So [these lower tariffs are] a great news story,” Blohm explains. “Right now, the reality is that we have a surplus of cheese. Cheese prices as of late have been lower and that’s what’s been pulling that milk price down into the low $15 area with some of the deferred contracts already seeing $14.” That said, the market is flooded in milk and dairy products she says. While every bit of extra demand will help the fundamental situation, she doesn’t see an increasing appetite for cheese in China as a silver bullet. “I don’t know how much of an increase it’s going to do because of course a lot of that goes with currency fluctuations as well,” she says. “And we have competition from Oceana. I would say though, that it’s going to hopefully see a small increase in the exports. The exports in general need all the help they can get.” According to Blohm milk prices could bounce another 50 cents in the near term but then they will do some sideways trading into the first quarter of 2018 because of strong milk production.
Read more...