Country Life Wednesday, April 8, 2020
MIELKE MARKET
COVID-19 devastates dairy markets Cheese, butter prices at lowest levels since ‘09 American milk prices are tumbling. Dairy product prices have plunged to 11year lows, all a result of the COVID-19 outbreak. The U.S. Department of Agriculture on Friday announced the March Federal Order Class III price at $16.25 per hundredweight, down 75 cents from February but still $1.21 above March 2019 and the highest March Class III since 2014. The three-month average for 2020 stands at $16.77, up from $14.30 a year ago and from $13.87 in 2018. But that’s where the good news ends. Class III futures have been pulled sharply lower. Friday’s settlements put the April price at $14.07, May at $12.18 and June $13.13, with a peak in November of just $14.95, a price that weeks ago hovered around $17. The March Class IV price is $14.87, down $1.33 from February and 84 cents below a year ago. It is the lowest Class IV price since September 2018. The threemonth average is $15.91, compared to $15.68 a year ago and $13.01 in 2018. Some help is available for farmers in the $2 trillion stimulus package dubbed the Coronavirus Aid, Relief, and Economic Security Act (CARES), but it remains to be seen how much of that will benefit dairy farmers. Hemorrhaging continued in the dairy markets in the April Fool’s Week, due
By Lee Mielke
to the COVID-19 epidemic. Cheddar cheese block prices saw nine consecutive days of decline and closed the first Friday of April at $1.15 per pound, down 44 cents on the week, on top of the 24.75 cents lost the previous week. The price was at a low not seen since July 2009 and 51 cents below a year ago. The barrels closed at $1.1375, 20.25 cents lower on the week, following a 16-cent drop the previous two weeks, and also hit the lowest level since July 2009 and 43.75 cents below a year ago. Cheese contacts are hopeful of a quick turnaround to the COVID-19 situation, says Dairy Market News, as retail accounts have slowed along with ailing food service orders. The bar and restaurant realm was one of the first sectors to be hard-hit, as people quit their normal congregating and socializing. Milk was plentiful in the Midwest and at midweek only discounted prices were reported. Cheesemakers say milk handlers are
calling regularly as plentiful milk is equating to a growing cheese supply. Cheese markets are “resolutely bearish due to precipitous drops on the Chicago Mercantile Exchange,” says DMN. Retail cheese sales in the West continue to be strong, but were down from the previous week. Orders from food service and international buyers are stable to lower. Cheese outputs are steady, but milk is abundant. Butter’s meltdown also continued, the commodity closing the week at $1.28 per pound, down 20.75 cents after dropping 26.75 cents the previous week. The price sat at 99 cents below a year ago, and at its lowest level since October 2009. Like many in the dairy industry, butter plant managers are facing a growing number of challenges due to COVID-19. Food service demand is bleak. Retail ordering is still firm, but with lighter restaurant and little to zero orders into educational institutions, butter inventories are growing. DMN said this: “While ice cream manufacturers and other plants that normally take on cream are running skeleton crews or even closed, the onus of current cream inventories falls on butter makers. Butter market prices are precipitously declining at disquieting levels and markets are resolutely bearish.” Western butter makers say offers for cream are abundant, but they cannot take on more risk. Churning is active and producers are making more butter than
can be sold in the near term, so stocks are growing. Demand from food service is virtually non-existent, and while retail demand is higher than usual, it is slowing. Pricing for bulk butter has become challenging as well. A price set one day could lose a sizable portion of its value the next trading day, according to DMN. Grade A nonfat dry milk saw its close at 86.25 cents per pound Friday, down 5.75 cents on the week. The price was 12.5 cents below a year ago, and the lowest since November 2018. CME dry whey was the one exception in the falling markets. It has held at 33 cents per pound for 11 consecutive sessions, 1.5 cents below a year ago. How low prices will go is anybody’s guess. FC Stone’s Dave Kurzawski had this analysis in his March 31 Early Morning Update: “The U.S. did away with the price support system in the 2014 Farm Bill and switched to a system where the government would buy dairy commodities and donate them to people in need when farmgate margins fell to low levels. However, that program was dropped in the 2018 Farm Bill. “The $2 trillion aid package passed by Congress does allocate $450 million for purchases of commodities to be donated to food shelves and you can be sure dairy will be part of that, but we do not have a hard floor directly under U.S. prices,” Kurzawski warned. Speaking for the April 6 Dairy Radio Now broadcast,
Kurzawski admitted there isn’t much in the way of a silver lining to look for right now. “We’re in a state of flux in terms of understanding what demand really looks like. On one hand we have seen tremendous retail sales, even on fluid milk, but foodservice declines are huge.” He noted what many have heard on the news, that “dumping of milk is happening around the U.S.” And while that’s very disheartening to producers and the rest of us, he warned of the longer-term consequences. “This is the time of year we normally make a lot of milk and dairy products and put them in coolers,” he said. Kurzawski believes not doing that now will have ramifications later this year. “If the U.S. economy gets humming again — and that is a wild card — two, three or four months down the road, we’re going to walk into a shortfall of inventory if we’re dumping milk today,” he said. Dairy products were flying off the shelves, along with toilet paper and hand sanitizer, in earlier weeks in reaction to the COVID-19 outbreak. The March 27 Dairy and Food Market Analyst (DFMA) reported this: “Just-released Nielsen scanner data for the week ending March 21 shows sales of butter were up 127%. Sales of cheese increased by 84%, fluid milk were up 53%, ice cream grew by 50%, and yogurt increased by 34%.” But the massive gains haven’t continued, according to the DFMA. “Instead, we heard of companies
canceling retail orders because ‘grocery store sales have started to look more normal.’ This was true across the dairy supply chain, including for companies in fluid milk, yogurt, butter and cheese. And with sales to restaurants approaching zero and no longer offset by record-setting retail sales, dairy manufacturers are left with some hard choices. Either cut production schedules, renegotiate contracts with suppliers, or build inventory,” the DFMA stated. The National Restaurant Association stated on its website that since March 1, the industry has lost more than 3 million jobs and $25 billion in sales, and roughly 50% of restaurant operators anticipated having to lay off more people in April. Many restaurants will sadly close permanently due to the COVID-19 pandemic, and so will many dairy operations. The Northwest Dairy Association makes these price projections for the Class III price and Pacific Northwest blend price (down in the range of $2 to $4 from what had been projected last month): Month Class PNW III Blend March $16.25 $16.25 (current) April $13.80 $13.60 May $11.70 $12.05 June $13.05 $12.50 July $13.80 $12.90 Aug. $14.50 $13.35 Sept. $14.70 $13.65 Oct. $14.75 $13.40 Nov. $14.80 $13.60 Feb. $14.70 $13.65 Lee Mielke, of Lynden, is editor of the Mielke Market Weekly. Whatcom County has about 85 dairy farms.
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Wednesday, April 8, 2020 • A13
IN BLOOM
Grow your own food in your happy place Given all the seismic shifts to our way of life in March, it feels like far longer than a month ago I last sat down to write about gardening. And while much has changed in one month, spring flowers continue to bloom, grass is still growing and gardens are bursting back to life right on schedule. Gardening, unlike so many events in our world today, is not cancelled — and for multiple reasons you may find it a more necessary part of your life than ever before. If you’ve never grown your own food or have limited experience with vegetable gardening, I have a few tips to keep in mind this planting season. First, let me preface by clarifying that Governor Inslee specifically named “garden stores and nurseries” as essential businesses that could stay open during his “Stay Home, Stay Healthy” executive order. And by my research, most of the nurseries and garden centers in Whatcom County are open in some form or another, either for in-store shopping or curbside pickup. Nurseries play a crucial role in helping you grow your own food, and thus have been deemed essential. Now, on to the tips! Tip #1: Choose the best site for your vegetable garden. Most vegetables require lots of sun to produce a good yield, so pick a place in your yard with at least six to eight hours of sun — the more, the better. Farmers don’t grow their crops in the shade, and neither should you! Tip #2: Determine what you have room for. Depending on the size of your garden space, you may choose to skip growing certain vegetables to make room for others. Corn, for instance, is a great late-summer treat, but it takes a lot of space to grow and is readily available inexpensively at any number of roadside stands. Consider allocating your garden based not only on how much of a vegetable you’ll make use of, but also on how much it costs to obtain it elsewhere and what that space could otherwise be used for. Tip #3: Learn what plants to put in the ground at what time. As tempting as it is to plant your garden all at once — you’re motivated to do it now, for Pete’s sake! — without some protection from cold nights, tomatoes, peppers and other heatloving plants shouldn’t be
By David Vos planted until late April or early May. If you’re unsure what to plant when, ask what’s recommended at your local nursery. Tip #4: Determine what to grow from seed and what to grow from starts. Again, consult with a local nursery on what to purchase. Most sell both seeds and starts, and while seeds are more cost-effective for some things, pepper seeds can take a long time to sprout, shortening your harvest and erasing any financial savings from buying seeds over starts. Conversely, some plants don’t transplant well and need to be grown from seeds, so don’t be afraid to ask an expert for help if you don’t know what to buy! Tip #5: Plant in partnership with a friend. Are
you good at growing cabbage and kale, but don’t have a hot enough location to successfully grow peppers? Team up with a friend or two to coordinate your garden plan and exchange produce throughout the season in order to maximize your efficiency and yields. Tip #6: Recognize that you’re not the only one looking forward to a plentiful harvest — bugs are, too! Whether you choose to grow your garden with the help of synthetic chemicals or organically, you will likely need to use some form of insect control. A product like Bonide Eight insect dust is a great insecticide for keeping bugs off your plants; likewise, Captain Jack’s dust, also from Bonide, is an effective organic option. Finally, as better spring weather arrives, be deliberate about turning off the news and getting out in the garden. Not only is it rewarding to watch things grow, but science has proven that so-called antidepressant microbes in healthy soil can boost your levels of serotonin — a hormone that contributes to feelings of happiness — as you get your hands in the dirt. So as you spend more time at home this spring,
Springtime quads At Countryside Dairy in February, a Holstein cow gave birth to quadruplet calves that have all grown well. Three are heifers and one is a bull. The mother is doing great as well, says the Schoneveld family. The chances of quadruplets all being born alive is 1 in 11.2 million. (Courtesy
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enjoy the opportunity to plant a vegetable garden, knowing that growing your own food will offer some security to your family as well as improve your mood. And these days, we all could benefit from some time spent in our happy place!
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