Tag: milk prices
NMPF’s Vitaliano Offers 2024 Dairy Economic Outlook
NMPF’s Vice President of Economic Policy Peter Vitaliano provides Dairy Radio Now listeners a look ahead at what farm-level milk prices will do in 2024. Farmers should benefit from lower feed costs, and with milk production expected to remain stagnant again this year, prices should gradually improve.
December DMC Margin Reverses Trend, Drops to $8.44/cwt
The December margin under the Dairy Margin Coverage (DMC) program bucked the trend that began in August of improving milk prices and margins, sliding $1.14/cwt to $8.44/cwt and matching the margin last seen in September. The renewed weakness was due almost entirely to a $1.10/cwt fall in the December all-milk price from November. The December DMC feed cost rose by 4 cents a hundredweight to $12.16/cwt of milk, with higher corn and premium alfalfa hay prices almost offset by a lower soybean meal price.
The average margin for all months of 2023 was $6.70/cwt, effectively tying last year with 2021 for the lowest average calendar-year margin under both the DMC and its predecessor, the Margin Protection Program (MPP). End-of-January futures-based forecasts indicated DMC margins averaging between $10.20/cwt and $11.00/cwt in 2024.
NMPF’S Cain sums up USDA milk pricing hearing
NMPF’s Stephen Cain provides Dairy Radio Now listeners a summary of what USDA will do now that its five-month-long national milk pricing hearing concluded at the end of January. NMPF and other parties will soon submit post-hearing briefs, and the USDA is expected to then weigh the evidence presented by witnesses and issue a draft proposal by mid-summer.
NMPF’s Bjerga on the Urgency of Changing the Class I Mover
NMPF Executive Vice President for Communications & Industry Relations Alan Bjerga speaks with RFD-TV about the need to change the Class I mover in a way that ends losses to dairy farmers that have totaled $1.2 billion since 2019. The mover is in the spotlight with the conclusion of USDA’s Federal Milk Marketing Order hearing in Carmel, IN.
Domestic Demand Outpaces Production
Whole and Lactose-Free Milk Shine Bright
By Alan Bjerga, Executive Vice President, Communications & Industry Relations, NMPF
This is shaping up to be an exciting year for both whole and lactose-free milk, two growing segments of fluid milk consumption that are poised for further gains in grocery aisles as well as Washington, D.C. policy circles.
First, the facts: Even as fluid milk continues its decades-long challenge of eroded consumption as beverage markets diversify and consumer preference shifts to other forms of dairy, both whole milk and lactose-free varieties are bucking that trend. According to data from Circana Inc., which tracks retail sales, whole milk sales rose slightly (up 8 million gallons, or 0.6%) in 2023 over 2022. Because overall fluid sales declined, whole milk now makes up 45.4% of total fluid volume sold and is easily the most popular variety.
Lactose-free milk, meanwhile, reached a milestone. By climbing 6.7% to 239.2 million gallons last year, it surpassed the sales volume of almond beverages, by far the most popular plant-based milk alternative beverage. Almond’s annual decline of 9.8% is a big part of an overall consumer move away from plant-based alternatives, which have now seen two straight years of sales volume drops. Buyers are emphatically rejecting years of misleading claims that these beverages are a worthy substitute to dairy.
What’s next?
The National Milk Producers Federation is pushing for full congressional passage of the Whole Milk for Healthy Kids Act, which overwhelmingly passed the House in December and stands good prospects of passage in the Senate — if the right legislative vehicle can be found in a jam-packed election year. Bringing whole and 2% milk back to school meal menus is a great way to improve the nutrition of the next generation of milk drinkers. We have a call to action on our website urging senators to take up the bill.
Lactose-free milk is becoming the industry’s spearhead in ensuring equitable access to milk across diverse populations in federal nutrition programs. It is simply asinine federal policy to do what some vegan activists are proposing — increase access in federal programs to plant-based beverages that are both nutritionally inferior and now falling out of favor with consumers — when a beverage exists that circumvents lactose intolerance and offers all of milk’s benefits because it is, after all, milk. You will be hearing more about this in upcoming months as we strive to make 2024 a year when people become more broadly aware of just how critical lactose-free milk can be for effective and fair nutritional choices.
In what’s been a challenging time for the industry, what can the success of whole and lactose-free milk tell us? It shows that, for all the proliferation of alternatives, consumers like milk that’s most like milk, in taste and composition. They also like milk that’s accessible for everyone who wants its benefits. Quality and diversity are promising building blocks for a prosperous future. That’s plentiful in dairy, and this year, what consumers are choosing also can inform better federal policy.
This column originally appeared in Hoard’s Dairyman Intel on Jan. 18, 2024.
November DMC Margin Barely Tops $9.50 for the First Time in 2023
The November margin under the Dairy Margin Coverage (DMC) program inched up $0.14/cwt from a month earlier to $9.58/cwt, marking its first time in 2023 above the maximum $9.50/cwt Tier 1 coverage level.
The monthly change was a product of modest price movements. The all-milk price rose $0.10/cwt to $21.70/cwt, while the DMC feed cost formula dropped $0.04/cwt to $12.12/cwt of milk. There was a bit more drama inside the DMC feed cost formula, with a $0.35/cwt increase in the soybean meal price factor slightly more than offset by a combined drop in the prices of corn and premium alfalfa hay. During the first ten months of this year, the average monthly change, plus or minus, in the margin was $1.22/cwt, the average monthly change in the all-milk price was $1.15/cwt and the average monthly change in the DMC feed cost was $0.37/cwt.
With one more month in to be reported for last year, the 2023 average margin is on track to average about $6.80/cwt, which would be the second-lowest margin for the DMC and its predecessor Margin Protection Program (MPP), just above 2021’s average DMC margin of $6.70/cwt. The end-of year futures prices indicated the margins would average about $8.60/cwt during January-September this year but improve during the fourth quarter to average about $9.10/cwt for the year.
Milk Prices Rise as Production Declines and Inventory Shrinks
NMPF’s Galen Outlines Latest Developments on FMMO Hearing, School Milk Legislation
NMPF’s Chris Galen provides the latest developments for the listeners of Dairy Radio Now on two key priorities for farmers: updating the milk pricing system, and expanding milk options in schools. The USDA’s national hearing on Federal Order modernization continued its review of Class I differentials this week in Indiana, while back in Washington, NMPF is building support for an anticipated vote next week in the House of Representatives on a bill that would expand students’ milk options in schools.
Doud, Economists Explore Dairy’s Future
The future of U.S. dairy farming is bright as global growth and American capacity for innovation and production combine to create a powerhouse, NMPF incoming president and CEO Gregg Doud and the organization’s economists said in presentations at NMPF’s annual meeting.
“In terms of the world of protein, dairy is a huge part of the future,” said Gregg Doud, who will take over NMPF’s reins on Jan. 1. Doud, a former chief agricultural trade negotiator for the Office of the U.S. Trade Representative, said opportunities are there for U.S. dairy’s taking with robust outreach and appeals to consumers worldwide.
“My message to you today is very simple,” he said. “Let’s go. Let’s get it in gear.”
Dairy producers in the past year have faced operating margins at their lowest since the federal dairy safety net was adopted in its current structure in 2014 as prices plummeted from record highs. In a panel of NMPF economists following Doud’s remarks, forecasts showed an improving price outlook next year, even as inflation continues to pose challenges for consumers.
“We see a road to recovery in 2024,” said Will Loux, head of the joint economics unit serving NMPF and the U.S. Dairy Export Council. “Things aren’t all roses, we still have really significant headwinds on the demand side both here at home and abroad, but we look at the world with a lot of optimism still, especially in the long run.”
NMPF’s Bjerga on Trade, FMMO
NMPF Executive Vice President Alan Bjerga speaks with RFD-TV about how all of agriculture needs to fight for the integrity of trade agreements in the wake of a USMCA dispute panel decision that failed to protect U.S. access to Canada’s market. The President’s Export Council, with member co-op Land O’Lakes representing farmers, discussed the importance of market access in a White House meeting on Wednesday. Bjerga also talked about the resumption of the USDA Federal Milk Marketing Order hearing in Indiana this week, and how repeated delays aren’t helpful for milk producers.
