Dairy Market Watch - May 2020

Katelyn Walley-Stoll, Business Management Specialist and Team Leader
Southwest New York Dairy, Livestock and Field Crops Program

May 26, 2020
Dairy Market Watch - May 2020

Price Optimism and CFAP Sign-Ups

By Katelyn Walley-Stoll, Cornell University Cooperative Extension

As published in their May 18th Livestock, Dairy, and Poultry Outlook, USDA is forecasting the 2020 All-Milk price to be $14.55/cwt, which is an increase from last month's $14.35/cwt forecast. They also are looking at 2021's all-milk price to be $15/cwt.

Bob Cropp in his monthly Dairy Situation and Outlook, is estimating that things will be a bit higher for the all-milk price, by at least another $1, with Class III into the high $16's. There is hope that the market will continue to recover slowly, especially if it follows at least part of the upward trend we're seeing on the futures market. From his report: "Milk price forecasts can change rather dramatically from one month to another. This is the situation between the April price forecast and the May forecast. In April it looked like the May Class III price would be about $11.00. The particularly good news is that it now looks like the May Class III price will be near $12.35. This increase is the result of unexpected rather strong rally in cheese prices. On the CME since the beginning of May, barrel cheese increased by $0.66 per pound and 40-pound blocks by $0.72. Since the beginning of May, butter has increased $0.45 per pound and nonfat dry milk $0.20. But since the increase has been mostly since the past 10 trading sessions, the May Class IV price will also be higher than forecasted in April, but only about $10.65 versus $10.15."

While there is hope to be found in the recent market upticks, it's unlikely that these prices will hold as high as the futures markets are trading. There, June and July Class III futures are in the $17's and $16's for the rest of 2020. There are some positive things on the horizon as restaurants begin to slowly reopen, and USDA increases their Section 32 purchases while also rolling out the food box program. We're also on the decline of this season's "Spring Flush", and are starting to see the effect of cooperatives' production restrictions/base milk implementations as farmers reduce milk production and increase culling. April's milk production was only 1.4% higher than a year ago, whereas March's production increased by 2.8%. There continues to be some milk dumping, although that seems to have subsided for the most part. However, as global economies head into recession, this could reduce both domestic purchases and export market sales. Additionally, there is the uncertainty of how community infection rates will change as businesses begin to open again and whether this will cause a second round of shut downs.

Don't forget to contact your local Farm Service Agency office to fill out your farm's Coronavirus Food Assistance Program (CFAP) application. This will provide eligible producers up to $250,000 in direct payments based on their documented production and a national payment rate. The benefit for dairies equates out to a $6.47/cwt payment based on first quarter production. You can also work with FSA staff to value livestock sale losses and crop inventories for payments in those commodity areas as well. While this won't make up for the entire loss producers will see in 2020, this will provide a significant cash infusion to help farms cash flow their business. It's important to know that FSA office staff are working remotely, so please start with a phone call to them to learn more about their process to get application items submitted, or to learn more about the eligibility of your specific operation.

Resources and For More Information:

Dairy Situation and Outlook, May 20, 2020 by Bob Cropp. https://fyi.extension.wisc.edu...

Dairy Situation and Outlook Podcast, May 2020 by Mark Stephenson & Bob Cropp. https://dairymarkets.org/PubPo...

USDA's New Direct Payments Program for Dairy Farmers, by Chris Wolf, Mark Stephenson, and Andrew Novakovic. https://dairymarkets.org/PubPo...

Livestock, Dairy, and Poultry Outlook, USDA ERS. https://www.ers.usda.gov/webdo...

Dairy Market Watch 2020 05 (May 2020) (pdf; 2027KB)

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Join us for our weekly Q&A and facilitated discussions during our Food Industry Virtual Office Hours to address questions on COVID-19. Speak directly to subject matter experts in sanitation, epidemiology, microbiology, virology, food safety culture, business continuity and the food safety of dairy foods, fresh fruits and vegetables, and processed foods and beverages.

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Join Laura Biasillo from Broom County Cooperative Extension for a morning of discussion on marketing fiber on July 11th from 9:00AM - 11:30AM. This workshop includes the topics of marketing strategies, how to conduct market research, creating a plan to reach customers, and networking with local fiber farmers and makers. The workshop will be held over Zoom and will be $20 to attend. More about this event and the registration link can be found here: https://www.eventbrite.com/e/localfiber-marketing-workshop-tickets-90854071975
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Tick IPM #3: Asian Longhorned Tick IPM

July 13, 2020
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The Asian longhorned tick (ALT) is a threat to companion animals, livestock and potentially also to wildlife. So far this species in the US has not been found infected with human pathogens. There is still a lot we don't know about ALTs, so this free webinar will serve as an overview of what we do know about the biology, ecology, and vectorial capacity of this tick species?and how existing approaches for combating native ticks may either work or backfire on this species. The presenters will also discuss other invasive tick species in the US and the potential for additional ones to become established.
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From our Team to Yours: COVID-19 Resources for Dairy Farmers

The South Central NY Dairy and Field Crops Team has compiled a list of articles on their blog that we think may be useful to dairy producers and their service providers as we all navigate the COVID-19 situation. Please stay safe and reach out to our team if you have questions or need help finding information. We are here to help with tools and resources to support all of the normal day-to-day dairy, livestock, and field crop management considerations, in addition to emerging topics related to COVID-19.

Do you have visitors or employees travelling outside of the state?

They might need to quarantine! In response to the high rates of COVID-19 happening in other parts of the country, the NYS Department of Health will be requiring anyone entering NY from restricted states to quarantine for 14 days. For essential farm laborers, this would involve an employee seeking COVID-19 diagnostic testing within 24 hours of entering the state, monitoring their temperature and symptoms while wearing a face covering in public spaces, and avoiding extended periods of time in public. The CAN continue to work while following proper protocols during this time. For more information, read this post from Cornell Agricultural Workforce Development or contact our Farm Business Management Specialist, Katelyn Walley-Stoll.

Dicamba Notice to Users, Distributors and Sellers - June 29, 2020

On June 3, 2020, the United States Court of Appeals for the Ninth Circuit vacated EPA's registration of three products containing the active ingredient dicamba, which effectively cancelled their federal registrations. The three products are: Xtendimax with Vaporgrip Technology, Engenia, and FeXapan.
On June 8, 2020, in response to the Court's decision, EPA issued a Cancellation Order for these three products. In light of the Court's decision associated with these registrations and the provisions of EPA's Cancellation Order to implement that decision, DEC is taking these actions:
1) Registrations - The registrations of the three products will be cancelled as of July 31, 2020 in accordance with the provisions of ECL Section 33-0713. Thirty days' notice will be provided to the registrants of these products.
2) Distribution or Sale - Distribution or sale of existing stocks of the three products shall be limited as follows:
• Distribution or sale by registrants is prohibited immediately, except for distribution for the purposes of proper disposal.
• Distribution or sale of products that are already in the possession of someone other than the registrant is permitted only for disposal or to facilitate return to the registrant or a registered establishment.
• Distribution or sale by commercial applicators is permitted to facilitate use no later than July 31, 2020.
3) Use - All use, including storage of open containers, is prohibited after July 31, 2020.
Questions about dicamba may be directed to pesticidecompliance@dec.ny.gov or ppr@dec.ny.gov or by calling 518-402-8727. 

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