Indiana Dairy Producers E-Newsletter
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IDP in Motion: Turning Anticipation into Action
The month of May always gives me a feeling of anticipation. Crops are going in the ground, the landscape around Indiana is greening up, and of course milk is in the spotlight at the Indianapolis 500 at the end of the month when the champion lifts a glass of cold milk in the Winners Circle.
There is also a lot to anticipate in our association as well as we work on various elements of the IDP strategic plan. We’re planning events and engaging in various forums to be sure your voice is heard on topics that matter to your operation. Attending forums like the one put on by the National Milk Producers Federation later this summer helps me add input as to what is important to Indiana dairy farms.
We have lots in the hopper and our Strategic Plan is providing a road map to turn anticipation into action. I look forward to seeing many of you in my visits across the state and wish everyone a safe spring season.
Steve
Steve Obert, Executive Director
317-779-6775
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Our Vision: To Make Indiana the most desirable state in which to produce milk.
Mission Statement
To promote a profitable, positive, professional image of
dairy producers while providing educational opportunities
for the interchange of ideas and to speak as a proactive voice
for Indiana dairy producers.
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In This Issue
Sponsor Spotlight
Industry Insights
IDP Member Moments
Dairy Market Summary
Industry Achievement
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Sponsor Spotlight: STgenetics Salutes Indiana Dairies
“STgenetics is proud to partner with Indiana Dairy Producers,” says Pete Dueppengiesser, STgenetics Central Region Sales Manager. “Indiana dairies are growing, and we are proud to see the success the dairies are experiencing. Along with our genetic products, our team can provide many services including genomic testing, strategic breeding plans, genetic and repro audits, AI training, and much more. Don’t hesitate to reach out!”
STgenetics® is consistently challenging the industry’s status-quo through science, research and technology development. Many of its established and latest innovations including Ultraplus™, Ultraplus High Purity™, EcoFeed®, Super Conventional™, Chromosomal Mating®, Vision+™, ULTRAFertility™, Beef Add On™ and FarmFit® are helping to revolutionize the beef and dairy industries. This STgenetics® Integrated Approach to management combines cutting edge genetics, innovation driven programs and gender-sorted semen to aid farmers in advancing their genetic progress while attaining herd goals.
Headquartered in Navasota, Texas, STgenetics is making the world greener, more sustainable, and profitable. By improving herd genetics through science and technology, we believe that the best way to predict the future is to create it, while feeding the world with our passion for the beef and dairy industries.
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Sponsor Spotlight: Welcome Dairy Dashboard, New IDP Sponsor
We welcome The Dairy Dashboard to IDP sponsorship! The Dairy Dashboard is a family of reports that provides financial, management and decision-making information for dairy producers and others on a monthly basis. Their other services include business plans, financing proposals, partial budgets, cash flow projections, advisory team facilitation, financial statements, benchmarks every month, year-end reports and ratios, and year-vs-year reports.
“We have had great success and fun working with Indiana dairy producers, and we are happy to support your excellent organization,” says Bruce Dehm, Agricultural Economist with The Dairy Dashboard. “Visit us at TheDairyDashboard.com.”
Thank you, The Dairy Dashboard, for your support!
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Industry Insight: 2023 Indiana General Assembly Wraps Up, Legislative Success for Farmers and Rural Indiana Celebrated
The gavel fell on April 28, 2023, to end this year’s long session of the Indiana General Assembly which included budget discussions. There were numerous issues being discussed and debated that impact Indiana agriculture. We thank our friends at Indiana Farm Bureau (INFB) for their hard work and leadership at the Statehouse as they advocate for rural communities and lift up the voice in farmers to be heard by legislators.
INFB provides a recap of key pieces of legislation impacting Hoosier farmers. You can read this recap by linking here which takes you to the INFB website.
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IDP Member Moments: Eddie O’Donnell
O’Donnell Has Global View, Indiana Insight for Dairy Industry
From the rolling green hills of Ireland to the sand swept deserts of Saudi Arabia to the pleasant pastures of Adams County, Indiana, Eddie O’Donnell has seen the dairy industry from many viewpoints. O’Donnell is a partner in Irish Acres Dairy LLC, milking 3,500 cows at operations in Butler, Indiana, and across the state line in Sidney, Ohio. His story began with growing up in Ireland, then continued as he went to work in dairies in Almarai Dairy Co. in Saudi Arabia for 10 years during the evolution of the dairy industry in the Middle East.
He learned a great deal in those years and credits mentors in the veterinary, nutrition, and facilities aspects of the dairy business from the U.S. with broadening his perspective. “With the background I gained, I was able to put it to use when a dairy came up for sale in Berne, and brought my young family across the ocean,” O’Donnell recalls.
Consolidation is the reality of the dairy business, yet O’Donnell reminds his fellow farmers of all sizes about the importance of dairy products. “Milk is an exceptional food that is so important to nutrition, and we’ve made many strides as an industry,” he says, adding his favorite indulgence is a glass of cold milk and a few squares of chocolate.
In thinking about the challenges facing dairy producers, he notes the misperceptions around animal husbandry. “We have pushed production higher per cow, with better nutrition and husbandry helping us achieve that success. We must take care of the cow for it to be so productive and need to keep telling our story.”
O’Donnell appreciates the way IDP helps educate many audiences while providing a way for dairy producers to connect with each other. “It is good to network with similar operations and our Executive Director Steve Obert is a down to earth leader, he illustrates who we are and the type of people we have in our industry.”
Innovation continues at Irish Acres Dairy, with a biodigester under construction by Dairy BC. “There are environmental and other efficiencies to be gained as this comes online later this year,” O’Donnell explains. While not currently using robots, he cites robotics as an important technology that can help farms address the ever-present challenge of labor.
It may surprise you that O’Donnell says rural Ireland is much like rural Indiana. “This is a wonderful place to raise a family in a tight knit community,” he says. With family involvement in 4-H, local sports and high school music events, the O'Donnells are proud to call Indiana home and be part of its dairy community.
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Fluid Times by Total Farm Marketing by Stewart-Peterson
Data as of May 1, 2023
Here is a summary of the dairy markets as we transition from April to May 2023.
Closing out April
Dairy market tones throughout the month of April have remained mixed with both positive and negative news. U.S. milk production continues to be slightly bullish, with production for March reported in April up only 0.50% from a year ago. Although cow numbers for March were up 31,000 head from a year ago, milk per cow was up just 3 pounds per cow. This kept production growth in check. From a cold storage standpoint, the April Cold Storage report showed U.S. butter stocks up 3% from a year ago whereas total natural cheese stocks were down slightly from March 2022. Despite a decline in cheese inventories, the current total U.S. cheese inventory is well above the 5-year average. Butter inventory, meanwhile, sits below its 5-year average. Both Class III and IV milk futures remain in a downtrend. For the month of April, May Class III lost $1.65 to $16.82 while May Class IV held steady at $17.94. Weakness in the spot markets is keeping nearby milk futures under pressure. Spot cheese is especially weighing down the dairy trade, closing the month at only $1.63875/lb. Additional pressure in the dairy market comes from a sell-off in feed. Weather has allowed for swift planting progress, and current chart technical for grains lean bearish.
Class III and IV Futures in the Red
- Weekly losses during the last week of April were found in all 2023 Class III and Class IV futures contracts; second month Class III futures rebounded off of lows but still settled 49c lower on the week.
- Active selling in the spot trades continued this week for whey and cheese, with each seeing 30+ loads traded. Despite the high volume, both lost 1c per pound.
- Active cow culling may help alleviate the spring flush with a 10.1% growth, year-over-year, for the week ending 4/15.
- The USDA revised the 2021 and 2022 total cheese production up by over 173.5 million pounds.
Spot Cheese Dragging Down Milk
- 2023 has shown a strong correlation of the spot cheese trade bringing Class III milk futures down with it.
- Spot cheese is trading at its lowest levels since November of ’21.
- If Class III is going to make any moves higher there will likely need to be a rise in the spot cheese market.
Kicking off May
The buying seen during the last week of April for the Class III complex showed itself to be premature, possibly linked to some end-of-the-month position squaring as the May through August Class III futures faced double-digit losses on Monday, May 1st. A weak spot trade did not help with cheese, whey, and powder lower while butter was unchanged. The feed markets remain volatile as corn prices approach one-year lows and soybean meal futures continue to drift towards the bottom end of their range, but with the main growing season ahead there is risk in that trend changing. This week will be busy with a Global Dairy Trade Auction on Tuesday, March export numbers on Thursday, and Dairy Products Production on Friday.
Late Week Enthusiasm Fails to Carry Over
- May Class III futures dropped 22 cents on May 1st to $16.60, matching last Tuesday's low close and erasing Thursday's gains.
- Spot cheese dropped 1.50 cents on May 1st after rallying more than a dime in Thursday and Friday's action.
- The premium in cheddar blocks over cheddar barrels closed at 11.75 cents, down from 26.25 cents on April 14.
- Class IV action was quiet with some small gains in futures; spot butter was unchanged as powder dropped 1.75 cents.
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The Western Regional Cheese Report indicated that cheese inventory levels are estimated to meet demand and spot market purchases have been steady. Cheese exports to Mexico and South America were noted, while some business to Asia continues to dwindle.
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The Midwest Regional Cheese Report from April 26 mentioned some possible downtimes for cheesemakers amid very plentiful milk supplies. Demand tones were mixed and some suppliers said inflation is hurting their bottom line
Margins Can Erode Quickly Even with Higher Milk Revenue
As you well know, a dairy farmer’s fixed costs include land and basic infrastructure. As herd size increases, you need to invest in new equipment and/or increasing employee costs, both exacerbated by the impact of inflation. Furthermore, a significant percentage of your profitability is directly tied to variable market costs that are not necessarily correlated to what you receive for the milk you produce.
To sum it up, even the best margins like the ones you’ve likely been enjoying lately can quickly deteriorate if farm expenses rise—especially those set by market prices—as milk prices slow down or retreat.
Managing the Margin
The question, then, is how to take steps to maximize your farm profitability. It all starts, of course, with your expertise: on-farm management to manage expenses, such as herd health via comfort and nutrition, employee training and development, and year-over-year equipment maintenance.
The other critical step is farm marketing—managing commodity market-driven prices and costs with consistency and discipline. Farmers that can manage those costs and revenue better than the next in any market condition are the farmers who are better prepared to win over the long term. Consider this: according to the Farm Bureau, in 2003 there were 70,375 licensed dairy herds in the U.S. By 2020? Only 31,657. That’s more than a 50% decrease over 17 years. Every advantage you can make for yourself in this highly competitive industry increases your odds of being the operation that makes it.
Strategic farm marketing will help you manage your revenue and costs through an array of tools, such as:
· Forward contracts with a milk plant or feed supplier
· Options and futures via your hedge account
· Government programs like Dairy Revenue Protection (D-RP), Dairy Margin Coverage (DMC), and Livestock Gross Margin (LGM)
Understanding these various price management tools is an important step. Knowing when and where to use them, alone or in combination, how much to spend on premium, and employing a consistent, disciplined, and rules-based approach to identifying market price strength and momentum is the next important step. There are many moving, changing parts and decisions that need to be weighed carefully. We advise seeking some level of professional guidance to maximize your efforts and make impactful decisions that benefit and protect your revenue.
We’re Here to Help
At TFM, we’ve been around for almost 40 years through market disruptions, both good and bad. Through it all, we’re proud of our work to help our clients prepare and prosper, no matter what markets may bring. If you have questions on how we can help, reach out to Mike Rusch at 262.438.0323 or via email at mike@totalfarmmarketing.com .
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing. Reproduction of this information without prior written permission is prohibited.
Total Farm Marketing and TFM refer to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. Stewart-Peterson Inc. is a publishing company. SP Risk Services LLC is an insurance agency and not licensed in all states. A customer may have relationships with all three companies. SP Risk Services LLC is an equal opportunity provider and is a wholly owned subsidiary of Stewart-Peterson Group Inc. Stewart-Peterson and Total Farm Marketing are equal opportunity providers.
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Industry Insight: NMPF Submits Comprehensive Proposal to USDA
On May 1, the National Milk Producers Federation (NMPF) submitted to USDA its comprehensive proposal for modernizing the Federal Milk Marketing Order (FMMO) system. This proposal is the product of two years of examination and more than 150 meetings held to build consensus behind updates to a program that last saw significant changes in 2000.
Dairy Herd Management magazine provides an overview of the proposal you can read by linking here.
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Industry Insight: Transport Stress in the Dairy Industry
By Jackie Boerman, PhD, Associate Professor, Animal Sciences, Purdue University
What is transport stress? If we think about the animal being handled, loaded, transported long distances, with limited access to feed and water during that transport, and then arriving at a new location these may all be stressful conditions. Transport stress causes both physical and physiological changes in animals as evident by changes in hormones, metabolism, immune response, behavior, and growth.
When we think of dairy animals, there are two populations that may be routinely transported for long distances 1) surplus calves that end up in the beef supply chain 2) heifers that are going to heifer growers and back to their home farms. The topic of surplus calves is slightly disconnected from most dairy farms as once they leave the farm these calves are out of sight. However, in a recent survey, many surplus calves in the U.S. are transported for more than 12 hours and may often be comingled at auction markets and transported again. These are often calves that are less than 2 weeks of age, making management on their home farm (i.e. colostrum feeding, health status) crucial to their future success.
While this is ongoing research, if we know that calves are expected to be transported for long distances, feeding them before they get loaded on the truck, ensuring we are only sending animals that are healthy and in good body condition will likely improve their success (i.e. improved growth, reduced morbidity) in their next phase.
The second group of animals that is often transported long distances is heifers going to and from heifer growers. These animals are often older in age and thus have a more established immune system with more body reserves. However, they too are often transported long distances and current research has shown the long-term negative impacts of transportation on immune system activation. By activating the immune system through a stress event, it requires energy that is no longer used for growth. Supplementation or injection of antioxidants has shown to reduce this immune system response and has led to increased growth rates.
If we think about the times that dairy animals are transported throughout their lifetime, there may be key points where we can change management to improve their welfare and productivity.
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Industry Achievement: Congratulations Dr. Boerman
We were happy to see the Purdue University Board of Trustees approved the promotion of Jacquelyn P. Boerman to associate professor of animal sciences. We appreciate all the work Dr. Boerman does for the Indiana Dairy industry and this promotion is well deserved.
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Individual membership in the Indiana Dairy Producers is $50. Encourage your dairy farming friends to join IDP! Also, any individual who is not a dairy producer but would still like to support IDP can join as an associate member. Download a membership/associate brochure here.
We appreciate our industry supporters. They make it possible for IDP to support the dairy industry in many ways. If your company is interested in finding ways to join IDP, download an information sheet here.
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Diamond Sponsors
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Platinum Sponsors
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Gold Sponsors
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Silver Sponsors
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Board of Directors
Executive Director
Steve Obert
812-779-6775
Arie Jan de Jong, President
Carrie Jo Bollenbacher, Vice President
Jacob Achen, Secretary
Jackie Boerman, Executive Treasurer
Board Members
Alex Lueken
Amy Weaver
Henk Sevenhuysen
Krent Frauhiger
Roger Hibschman
Aaron Claycamp
Industry Advisers
Chris Moore
Sarah Wagler
Steve Howell
Todd Janzen, Attorney
Zach Allen
Tanya Westfall, Executive Assistant
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Visit Our Bronze Sponsors |
(Click the bronze button) |
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IDP Corporate Sponsors
There is a growing list of companies that recognize IDP's value to Indiana's dairy industry. Please visit our list of companies that have become Corporate Sponsors for only $100. If you know of a company that may have an interest in supporting IDP at some level, please download a brochure here.
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Contact Chris Moore
For free insurance consultation and quotes on your farm and agribusiness Insurance needs! IDP members receive an exclusive discount on SECURA Insurance.
Chris Moore
317-650-4519
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Indiana Dairy Producers
7826 S 550 E
Fort Branch, IN 47648
812-779-6775
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RESOURCE CENTER
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Indiana Grazing &
Forage
NRCS Website
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Check out the resources available to you on the
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