With the Republican sweep of the recent US elections, global markets are focusing on the forthcoming risk of rising US protectionism and potential trade tensions. The November RoboResearch Food and Agribusiness report notes for dairy, a reemergence of tariffs could disrupt trade flows and the threat of mass deportations could disrupt US farm labor availability. Uncertainty will be the tone in 2025 as the world waits to see how many of President Trump’s campaign promises will be put into law. And remember, the market detests uncertainty.
Month: November 2024
FMMO Modernization Final Decision; Next Producers Will Vote
The U.S. Department of Agriculture (USDA) Agricultural Marketing Service (AMS) issued a final decision on its website proposing to amend the uniform pricing formulas applicable in all 11 Federal milk marketing orders (FMMOs). This rule making proceeding was requested by the dairy industry to evaluate changes to the uniform pricing formulas applicable to all 11 FMMOs. The proposed changes are based on substantial input and must be approved by eligible producers in each marketing order via a producer referendum before they take effect.
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The Opportunity For US Dairy In Guatemala
In 2023, U.S. consumer-oriented export values reached a third-consecutive record on 15 percent growth from the previous year according to the most recent International Agricultural Trade Report from the USDA Foreign Agricultural Service. Products with growth and potential for U.S. consumer-oriented agricultural exports include (1) poultry and meat products (excluding eggs), (2) dairy products, (3) pork and pork products.
Guatemala, with a population approaching 18 million, is the largest economy in Central America (excluding Mexico). Following a decade of strong gross domestic product (GDP) growth, Guatemala’s economy is on trend to grow 3.5 percent in 2024 and 3.1 percent in 2025, driven by global Guatemalan export demand and private consumer spending supported by strong cash inflows from the United States. However, Guatemala faces headwinds from increasing inflation expectations and disruptions related to natural disasters. The country also continues to struggle with high poverty rates, income inequality, and underdeveloped infrastructure, which could pose hurdles to sustained economic growth.
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Iowa Milk Up 3 Percent YOY
Milk production in Iowa during October 2024 totaled 508 million pounds, up 3 percent from the previous October according to the latest USDA, National Agricultural Statistics Service – Milk Production report. The average number of milk cows during October, at 243,000 head, was 2,000 above last month and up 4,000 from October 2023. Monthly production per cow averaged 2,090 pounds, up 30 pounds from last October.
Shortfall in dairy cow slaughter persists
The Daily Livestock Report shows cow slaughter and lean grinding beef supply has been limited for much of the year. That beef cow slaughter is down should not come as a surprise. The beef cow herd at the start of the year was the lowest in half a century and a simple return to a normal culling rate implied a double digit decline in slaughter. That’s what’s happened so far. What is surprising is that dairy cow slaughter has been consistently below year ago levels for much of the summer and so far this fall despite dairy
producer profits reaching some of the highest levels in years.
For the week ending November 2 dairy cow slaughter was 48,295 million head, 13.4% lower than a year ago. Since June, weekly dairy cow slaughter has declined by 166k head (‐13%). Beef cow slaughter during this period has been down about 300k head (‐20%). Why the decline in dairy cow slaughter? Lack of dairy replacement heifers and the resulting high price for replacements.
USDA Issued Its Final Decision On Uniform Pricing Formulas
On November 12, the U.S. Department of Agriculture (USDA) Agricultural Marketing Service (AMS) issued a final decision on its website proposing to amend the uniform pricing formulas applicable in all 11 Federal milk marketing orders (FMMOs). This rulemaking proceeding was requested by the dairy industry to evaluate changes to the uniform pricing formulas applicable to all 11 FMMOs. The proposed changes are based on substantial input and must be approved by eligible producers in each marketing order via a producer referendum before they take effect.
Consistent with the recommended decision published in the Federal Register July 15, 2024, the final decision puts forth a package of amendments to update formulas and factors based on the evidentiary record of the proceeding. It also makes certain limited changes from the recommended decision based on public comments and reevaluation of record evidence, as follows:
- Reduction in the delayed implementation of the revised skim milk composition factors from 12 months to 6 months;
- Inclusion of a $0.0015 marketing cost factor in all make allowances;
- A modification to the methodology used to determine the nonfat dry milk make allowance; and
- Limited changes to certain county-specific Class I differentials.
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ISU Extension and Outreach Dairy Team webinar on December 19 Explains Extra-Label Drug Use in Cattle and How Aspirin Fits In
The Iowa State University Extension and Outreach Dairy Team monthly webinar series continues Thursday, Dec. 19, from 12 noon to 1 p.m. Allison Vander Plaats will discuss the topic of extra-label drug use.
Aspirin has never gone through the process of being approved by the Food and Drug Administration (FDA) for use in cattle. The FDA released a letter to veterinarians this week emphasizing that aspirin use in dairy cattle and other food animals is prohibited.
Americans Are Finally Drinking More Milk
U.S. fluid milk sales have changed substantially over the past several decades. This graph depicts total fluid milk sales by product from 1975 through 2023. Although total fluid sales didn’t vary dramatically during the first 35 years of this time frame, they have decreased by 22.0 percent since 2010. In addition, the mix of products comprising this total has changed significantly, as indicated by the same graph.