Georgia Milk Producers Weekly Enews |
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De-Pooling and Record-Large Negative PPDs Continue Into July
By Dr. John Newton, AFBF Economist
On the back of COVID-19-related price shocks and a record-high cheese price, the July Class I milk price was nearly $2.60 per hundredweight, or 13%, below where it would have been prior to a 2018 farm bill change, spurring the withholding of 8-plus billion pounds of milk over two months, a 32% reduction from the prior year, from Federal Milk Marketing Order revenue sharing pools across the county.
As a result, FMMO revenue sharing pools were short $527 million in June and $667 million in July, for a combined $1.2 billion. This shortfall caused record-low FMMO minimum milk prices across the U.S. that showed up in dairy farmers’ milk checks as negative producer price differentials The PPD in California, for example, amounted to nearly -$10 per hundredweight for July. Put simply, most dairy farmers are not happy. To make matters worse, public and private risk management tools were unable to protect against these record-large milk check deductions.
De-Pooling and Negative PPDs
To summarize, in component pricing orders, proceeds from the pool are based on the difference between the classified value of the milk and the component value of the milk. When the component value of the milk exceeds the classified value of the milk, the proceeds from the pool are negative and result in a negative producer price differential. When the pool return (PPD) is expected to be negative, handlers may seek to de-pool higher-valued manufacturing milk to avoid paying into the pool. Importantly, de-pooling manufacturing milk to avoid negative PPDs is allowed under FMMO rules.
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Appointments Made to Georgia Agriculture Commodity Commission
From Southeast Agnet
The Georgia Agriculture Commodity Commission Ex-Officio Committee met on July 30, where it selected new appointees to serve a term of three years on their respective commodity commissions. At the conclusion of this three-year term, they will be eligible to be reappointed for additional terms. The new appointees are as follows:
- Apple Commission- Janice Hale, David Lillard and Stephen Aaron
- Blueberry Commission – Russ Goodman, Steve Mullis and Shane Wade
- Corn Commission – Rodney Harrell, Vann Wooten and Wallace Anderson
- Cotton Commission – Lee Cromley, Chris Hopkins and John Ruark
- Equine Commission – Ron Smith
- Milk Commission – Tim Camp, Pete Gelber and James Coble
- Peach Commission – Jeff Wainwright, Duke Lane III and Lee Dickey
- Pecan Commission, RG Lamar and Lanair Worsham Jr.
- Soybean Commission – Greg Mims, Tony Smith and Mark Arial
- Tobacco Commission – Carlos Vickers and Brandt Clifton
- Vegetable Commission – Dick Minor and Glenn Heard
Georgia Agriculture Commodity Commissions are created by the Georgia Legislature. Furthermore, a market order of each commission is passed by the growers of that respective commodity which allows for assessments on the commodity to be paid by each of the producers of such commodity. These funds are used for research, education and promotion of the commodity. Members of the commissions make decisions on how funds are spent and programs the commission supports. Read story here>>>
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2020 GEORGIA NATIONAL FAIR CANCELED
From GA Farm Bureau
On Aug. 12 the Georgia Agricultural Exposition Authority made the executive decision to cancel the 2020 Georgia National Fair with a proposed modified schedule for the Youth Livestock Exhibitions. This difficult decision was driven by the impact of COVID-19 and the desire to do what was best for staff, volunteers, fairgoers and all vested parties.
The Youth FFA and 4H Livestock Exhibitions are the foundation of the Georgia National Fairground’s mission. It is with pride that we are able to continue to offer them the “Fair Showing Experience” so that they can showcase their hard work and dedication in the agriculture industry. Guidelines have been put in place to help ensure that all exhibitors and their families are abiding by State and CDC regulations as well as aiding to keep our facility a safe place during this time. The show schedule, as well as those specific guidelines will be made available within the next few weeks. Registration for these livestock projects will remain open until September 1, 2020 online only, at www.georgianationalfair.com. This event will be a private event, open only to those exhibitors and their immediate family, no general admission or spectators will be allowed on grounds throughout the livestock shows.
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From Corey Geiger, Hoard's Dairyman
Negative producer price differentials (PPDs) reared its ugly head in June milk checks and will reappear in July. That’s due to the large $10.78 price spread between the $24.54 Class III and the $13.76 Class IV prices for July 2020 federal order prices.
What’s taking place?
There have been a number of reports explaining the negative PPD situation
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From Progressive Dairy Editor Dave Natzke
USDA Secretary Sonny Perdue announced a number of updates to the Coronavirus Food Assistance Program (CFAP), including an extension of the sign-up period and a timeline for the final payment installment. Two parts of Perdue’s announcement are most significant for dairy producers:
The second of two installment payments will be distributed beginning the week of Aug. 17.
Producers with approved applications initially received 80% of their payments. Beginning Aug. 17, the USDA’s Farm Service Agency (FSA) will automatically issue the remaining 20% of the calculated payment to eligible producers. Producers who received initial payments need not apply for the second installment.
For dairy farmers, the total CFAP payment rate will equal about $6.20 per hundredweight (cwt) on their first-quarter 2020 milk production. The first installment payment equaled $4.71 per cwt on a producer’s certified milk production for the first quarter (January-March) of calendar year 2020.
The second installment payment is based on a national 1.4% adjustment in milk production (1.014 X first-quarter milk production) multiplied by $1.47 per cwt.
Going forward, producers who apply for CFAP will receive 100% of their total payment, not to exceed the payment limit, when their applications are approved. Read more here>>>
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August 2020 Dixie Dairy Report
In this issue:
Cheese and butter prices move lower
Higher blend prices
More milk nationwide, but less in the southeast
Up and down fluid milk demand
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Manage risk during milk's wild price ride
By Chris Torres, Farm Press Magazine
If you’re a dairy farmer in the Northeast, you probably looked at your July milk check with jaw-dropping disbelief. Class III prices are hot right now, but negative producer price differentials (PPD) meant that you couldn’t cash in on that hot market.
Several factors, some of them in place long before the COVID-19 pandemic arrived, are helping drive these unusual fluctuations in farm gate milk prices. This includes the timing of pricing reports, a new calculation on the Class I mover and depooling of milk in the federal milk marketing order.
The good news is that the worst is likely over. The bad news? COVID-19 is still here, and it could roil markets again.
So, what’s a producer to do? A good risk management strategy is a start. And there is plenty of room for participation. Read more here>>>
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ADS Summer 2020 Newsletter
From UGA CAES Department of Animal and Dairy Science
In this issue:
- Michael Azain
- Department news
- From the department head
- Kylee Duberstein
- Valerie Ryman
- Student Spotlight
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Entry Deadline for Inaugural Dairyland Classic Dairy Show is September 1st
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By Abbie Cox, 2020 Hoard’s Dairyman Editorial Intern
“You can’t save your way into making money, you have to make milk,” said Gordie Jones on the August 5 Hoard’s Dairyman DairyLivestream. This advice normally applies to all dairymen, everywhere. Yet, when the COVID-19 pandemic began its detrimental path through the milk market, many dairy producers were asked to cut their milk production.
“COVID-19 has given us winners and losers, depending on where, and by who, your milk was marketed and processed,” explained Jones, the owner of Central Sands Dairy.
Many dairyman turned to Jones for advice on how to cut their milk production without harming their herd. “Everyone who called me was sitting in one of two boats – either they preferred to dump the milk and hope for a government payment or they dropped their production from the bottom of the herd,” he said.
Jones’ advice to those in the second boat was simple, change the overall ration to have lower energy or simply feed the low cows the dry cow diet. He favored the latter option. A high-fiber, low-energy diet, like that of the dry cow diet on most farms, would keep the cows in the best health and cut their milk production significantly without harming the health of the overall herd or requiring a new ration formula. Read more here>>>
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USDA Extends CFAP Deadline to September 11
By Anna-Lisa Laca, Dairy Herd Management
The USDA on Tuesday announced they’ve extended the deadline to apply for the Coronavirus Food Aid Program to September 11. Additionally, producers with approved applications will receive their final payment.
“President Trump is standing with America’s farmers and ranchers to ensure they get through this pandemic and continue to produce enough food and fiber to feed America and the world. That is why he authorized this $16 billion of direct support in the CFAP program and today we are pleased to add additional commodities eligible to receive much needed assistance,” said Agriculture Secretary Sonny Perdue. “CFAP is just one of the many ways USDA is helping producers weather the impacts of the pandemic. From deferring payments on loans to adding flexibilities to crop insurance and reporting deadlines, USDA has been leveraging many tools to help producers.”
Earlier this week, 28 industry groups pressured the agency to extend the deadline and do more to promote the program to farmers hurt by COVID-19. Read more here>>>
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Other Stories to Check Out This Week >>> |
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TO ADVERTISE: EMAIL AD AND CONTACT INFORMATION TO FARRAH NEWBERRY at gamilkproducers@gmail.com
UPDATED 8/14/20
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For Sale- DeLaval 84 Vacuum Pump on Stand, Oil Reclaimer, 10 HP- 3 Phase Electric Motor. New Bearings, New Oil Seal, New Belts. $2000
For sale - Please contact John Felder for more information at 803-682-3425:
- Dairy Tech Bay Pasturizer - $4,000
- Tidenberg Hydraulic Hoof Table (like new) - $5,000
- Mench Sand Trailor - $14,000
- Hall Stall Sand Leveler (new) - $1,000
- Claas Silage Choppers - 960 1875 cutterhead hours, 4WD, 600 orbis, HD300 PU - $190,000
- Fans Cool Aire
- 18 54" $225.00
- 20 48" $125.00
- 20 35" 100.00
WANTED: Peter's Cattle Co. will buy any dairy, beef, and cross, bottle or weaned, bulls, heifers or free martins. Pick up weekly 7 days a week. Chris- 470-255-8515
Bull Calves WANTED: Competitive pricing with 6 day a week pickup. Brandon Mason Cattle Company 912-632-4490
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Farmer to Farmer Support Program Available for SE dairy farmers
Farmers across the Southeast are experiencing uncertain times like never before. All aspects of agriculture have been hit by market losses due to COVID-19, but dairy has reached a level of uncertainty that many have never experienced.
As we navigate through these next few months, dairy producers across the Southeast have come together to introduce the "Farmer to Farmer Support Program." If you find that you need support or would like to talk to a fellow farmer or industry friend, they have several volunteers that are willing and able to help. Georgia Milk Producers has also put together a packet on the program that you can access by clicking here.
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