Country Life May 2020

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Country Life Wednesday, May 13, 2020 • lyndentribune.com • ferndalerecord.com

MIELKE MARKET

Trying to dig out of bummer milk prices    Some light is appearing in the COVID tunnel for dairy farmers. However, there are still dark days ahead in regard to their milk checks.   “We’re seeing strength return to dairy markets due to ‘pipeline refilling,’” said FC Stone dairy broker Dave Kurzawski on the May 4 Dairy Radio Now broadcast. “Late March, early April, the supply chain did not want to keep product in coolers that they weren’t sure they could sell. Eventually that inventory got worked down and the supply chain, which is normally very consistent, saw that wave of demand

By Lee Mielke

return, the pipeline get refilled. Plus states started to reopen, at least partially, for limited restaurant service. Add to that government intervention.”

The tone was even better than a week earlier, when dairy product prices plunged to multi-year lows, pulling farm milk prices with them.    The U.S. Department of Agriculture announced the April Federal Order Class III benchmark milk price on May 1 at $13.07 per hundredweight (cwt.), down $3.18 from March and $2.89 below April 2019. It is the lowest Class III price since May 2016, another victim of the COVID pandemic that has invaded our world.    Now Uncle Sam is grocery shopping. Agriculture Secretary Perdue has announced details on

$470 million in additional Section 32 food purchases in third quarter, enabling USDA to purchase surplus food for distribution to communities nationwide.   $120 million was earmarked to buy dairy products in July, August and September. A USDA press release stated, “The purchases will provide additional support for producers and Americans in need, in response to changing market conditions caused by the COVID-19 national emergency.”    While many criticize dairy’s allocation as being inadequate and the time it’s taking to see relief, the

government will purchase $800-$900 million worth of dairy products, according to Kurzawski, purchases that normally run $400-$450 million. This starts with the trade mitigation program, which is ongoing and stems from the China-Mexico tariff trade war issue, then the Section 32 purchases, the Family First Corona Virus Relief Act, and lastly the Food Box program, which will purchase fresh fruit and dairy, food that is ready to go to consumers. “The market is well supported for the time being,” Kurzawski concluded.    Speaking of supply chain, Tyson Foods stated

Jersey cows graze in pasture of the Leroy Lagerwey farm east of Northwood Road last week. (Calvin Bratt/Lynden Tribune)

Monday that the coronavirus crisis will continue to idle U.S. meat plants and slow production, despite President Trump’s Executive Order that plants remain open. Some retail outlets, such as Costco and Kroger, are therefore limiting customer meat purchases and at least one major fast-food chain has reported being short of beef for hamburgers.   There was some encouragement in last week’s Global Dairy Trade auction. Even though butter and cheese pulled the weighted average down 0.8%, it was less than expected and followed the hefty 4.2% drop April 21. Some 36.2 million pounds of product was offered, lowest total in a year.    The losses were led by buttermilk powder, down 10.3%. GDT cheddar was down 6.8%, following a 1.9% uptick on April, and butter was down 5.8%, after a 3.6% decline. Rennet casein was down 5.1% and anhydrous milkfat was off 2.4%, after leading the losses last time at 7.0%.    Gains were led by lactose, up 7.9%, and skim milk and whole milk powder. Both were up 0.1%, following declines of about 4 to 5% last time.    FC Stone equated the GDT 80 percent butterfat butter price to $1.7112 per pound U.S., down 11.1 cents from the last event. Chicago Mercantile Exchange butter closed Friday, May 8, at $1.29. GDT cheddar cheese equated to $1.8665 per See Mielke on A12

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