Mielke Market Weekly

GREENSEAM, from pg. 10

This column was written for the mar- 17, and the most since April 20. Prices short-term remedy, says Dairy Market News. Milk keting week ending Sept. 10. averaged $3,927, up $100 from the last availability has begun to balance out after the ini-

For the third month in a row, the U.S. event. tial school demand rush for bottled milk. Department of Agriculture lowered its Skim milk powder led the gains, up 7.3 After jumping 9 cents the previous week, butter estimate for 2021 milk production in its percent. Butter was up 3.7 percent, and closed at $1.7850 per pound, down 1.25 cents on the latest World Agricultural Supply and anhydrous milkfat was up 3.1 percent. week but 30.5 cents above a year ago on 24 sales. Demand Estimates report. USDA also lowered the 2022 estimate, citing lower dairy cow numbers and output per cow for both years. Whole milk powder was up 3.3 percent and Cheddar was up 3.6 percent. Slowing milk supplies in Europe (and to some degree in the United States), Cream continues to tighten. Seasonal drawdowns have begun to take place due to heat and humidity. Churns were not as active over the holiday weekend but cream was available. Post-holiday, some say 2021 production and marketings were meeting good dairy demand was GDT’s cream is out of their fiscal reach. Plant managers estimated at 227.8 and 226.7 billion message, according to StoneX Broker continue to report employee shortages and truck pounds respectively, down 300 mil- Dave Kurzawski in the Sept. 13 drivers are short so cream hauling issues continue. lion pounds on production from last “Dairy Radio Now” broadcast. “Milk Market tones are awaiting direction. As the stronmonth’s estimates and 400 million tightness is the key underpinning ger demand season looms, some foresee strengthenlower on marketings. for all of the markets, both here in the U.S. and ing prices ahead. 2022 production and marketings were estimated globally,” although it’s not a “terrible tightness.” n at 230.6 and 229.5 billion pounds respectively, down 600 million pounds on production and down 700 million on marketings. Butter, cheese and nonfat dry milk price forecasts for both years were raised on improving demand and lower production. Whey prices were unchanged for both years. Class III and Class IV milk price forecasts were raised. Look for the 2021 Class III price to average around $16.65 per hundredweight, up a dime from last month’s projection and compares to $18.16 in I asked about the increased costs of production and Class III futures not promising much in the way of breaking even — let alone making a profit, and he agreed. Kurzawski said that was felt more acutely this summer in Europe, but U.S. farmers will be feeling it in coming months. The 2022 average, which was at $17.60, would normally be considered a good price, he concluded, but not so much now. “There are things farmers can do to protect themselves as we enter a bigger demand period with schools reopening and the holidays upon us.” After 18 months of expanded unemployment benefits to millions of Americans who lost jobs during the pandemic, the increased payments expired as of Labor Day. The federal weekly supplement to state unemployment payments was $600 per week throughout summer 2020 and $300 since December 2020. HighGround Dairy says more than 11 million people are impacted by the reduction, yet “Simultaneously, there are a record 10 million job openings across the U.S. as businesses in a wide variety of sectors search desperately for workers.” 2020 and $16.96 in 2019. The 2022 average was n “The end of expanded unemployment benefits is estimated at $16.45, up 30 cents. Back in Chicago, block cheddar closed the Labor not expected to quickly solve the labor shortage The 2021 Class IV average was pegged at $15.55, up 40 cents from a month ago and compares to $13.49 in 2020 and $16.30 in 2019. The 2022 average was projected to hit $16.05, up 75 cents from last month’s estimate. n Day holiday shortened week at $1.79 per pound, up 5.5 cents but 37.5 cents below a year ago. The barrels climbed to $1.49 on Sept. 9 but finished the next day at $1.4775. Only six cars of barrel was sold on the week at the CME. Midwest cheesemakers tell Dairy Market News that good demand remains despite continued Covid though,” says HighGround Dairy. “In dozens of states that ended expanded benefits earlier this summer, there was not a substantial increase in job applicants in recent weeks. Many unemployed workers cite concerns about child care and the continuing pandemic in their hesitation to return to the workforce.”

In the week ending Aug. 28, 62,400 dairy cows resurgences. Pizza cheese, curds, and cut-and-wrap Lee Mielke is a syndicated columnist who resides were sent to slaughter, up 3,400 from the previous retail varieties are moving well but “production hic- in Everson, Wash. His weekly column is featured in week, and 8,300 or 15.3 percent above that week a cups” are regularly reported. Employee shortages newspapers across the country and he may be year ago. have plants working with fewer employees during a reached at lkmielke@juno.com. v

The four-week rolling total continues to gain pre- strong demand season and some do not foresee a mium on year ago levels, says StoneX, up to 12 percent above year-ago levels this week. “This high slaughter level reiterates the theme that the dairy herd is continuing to contract.”

USDA data showed July milk production at 19.1 billion pounds, up 2 percent from July 2020. The latest Dairy Products report shows July cheese output totaled 1.15 billion pounds, up 2.4 percent from June and 3.5 percent above July 2020. Year-to-date output stood at 7.9 billion pounds, up 3.3 percent from the same period in 2020.

Global dairy trade strengthened this week as evidenced in the Global Dairy Trade auction. The weighted average jump 4 percent, following the Aug. 17 0.3 percent increase, and was the biggest gain since March 2. Traders brought 55.3 million pounds of product to market, up from 49.7 million on Aug. Biz students should be ‘comfortable’ in ag address the employment gap within the agriculture and food companies in our region. “There is amazing talent in business graduates and we in agribusiness need to find a way to connect with them so they can truly see the opportunities,” Ziegler said. He also noted that while business students might feel agriculture is outside of their comfort zone, professionals in the ag industry may feel the same way recruiting non-ag students. At Minnesota State Mankato, we are working to bridge that comfort zone. “We all need to learn to be more comfortable of

MIELKE MARKET WEEKLY

By Lee Mielke

MARKETING

being uncomfortable,” Ziegler said. “Even though we may have to spend a bit of time teaching business graduates ag terminology, the payoff of new perspectives is there.”

Talent in the GreenSeam focuses on developing talent and promoting careers in agriculture and food. Dr. Shane Bowyer is the Director of AgriBusiness and Food Innovation in the College of Business at Minnesota State University, Mankato and is on the GreenSeam Talent Committee. He can be reached for comments or talent ideas at shane.bowyer@mnsu. edu. v

By DICK HAGEN

The Land Staff Writer Emeritus SPRING VALLEY, Minn. —Years back when we talked about U.S. vineyards and wineries, California, Michigan and New York tended to predominate the discussion. No more. Today, Minnesota vineyards generate much of the chatter. And that’s mostly because of the intensive cold climate genetic engineering of winter-hardy grapes at the Minnesota Horticultural Research Center in Chanhassen. The enterprising and entrepreneurial spirits of Minnesotans eager to generate new ambitions in the rewarding — but very challenging — ambitions of grape farming add to the mix as well.

Back in 2005, I ventured into the vineyard adventure, planting 620 grape vines into our three-acre vineyard on the north edge of Olivia. Generous help from good friends was a blessing. In 2008 we reaped our first harvest. Yep, it takes some toil, patience and energy; so suffice to say getting into the grape growing business was a bit challenging; but a very learning experience. However, after eight years of toil, we sold our ‘Little Ponderosa’ 10-acre farmstead and became a ‘city slicker’ in Olivia, the Corn Capital of Minnesota.

ON THE COVER: Director of Winery Operations Justin Osborne stands in the barrel room of Four Daughters Vineyard and Winery.

Photos by Dick Hagen Justin Osborne planted the Four Daughters vineyard with a skid loader and some helping hands. Today the winery grows nine different varieties of grapes.

Which leads me to this story: My wife and I, along with seven other Renville County folks, enjoyed a five-day ‘spring break’ at a cozy VRBO in Lake City, Minn. Obviously, where to dine and drink always rates high with us seniors, so this year a Minnesota winery was the choice.

That’s a roundabout way of introducing Justin Osborne, age 38 and Director of Winery Operations at Four Daughters Vineyard and Winery, located on State Highway 16 west of Spring Valley, Minn. “I’m part of the family that started this operation 10 years ago,” said Justin adding, “At that time we weren’t thinking anything like what we have today.”

Four Daughters Vineyard and Winery is a fully operational winery, cidery, restaurant and event center. The estate includes a tasting room and large production areas, as well as a six-acre vineyard.

Osborne said the restaurant and fine dining idea come into being when Four Daughters hired their chef. “We found a good one,” he said. “We wanted to get into some intrinsic foods. Our new chef has a flair for clever twists on classic foods. That’s why we now offer brick oven pizzas, 4-D nachos, blood orange and fennel salad, plus a cheese and charcuterie board. Our caramel Macchiato cake gets some raves. It’s layers of ice cream, Four Daughters Pinot Noir (red

See FOUR DAUGHTERS, pg. 16

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FOUR DAUGHTERS, from pg. 15

wine), chocolate cake, espresso gelato, and our kitchen’s special coffee. All topped with house-made salted caramel, fudge, and whipped cream.”

As for the vineyard, Osborne planted the grapes with some helping hands and a skid loader. Four Daughters grows nine different varieties of grapes. “Right now we have nine; but really just four main production blocks: Brianna, Edelvise, Marquette and Frontenac,” he said.

Osborne said Sangria Rosa is their most popular wine. “But in our dining area, American Pinot Noir is number one,” he added. “I like red wines, like our Big Boy Blend. We offer two Ports: Velvet Hammer and Pinot Noir Reserve. Both are doing extremely well. Our grapes lend themselves very nicely to our Port wines.”

Unlike the corn and soybean crops across Minnesota, the grape crop this year isn’t being affected by a lack of rain. “This dryer weather is okay for grapes, so we’re anticipating a pretty good crop,” Osborne said. “Soil moistures were plentiful in early season. My father-in-law grows about 6,000 acres of corn, so that takes preference over my six acres of grapes. My vines aren’t hurting; however, I prefer regular rainfalls for all my farmer friends.”

Yes, 6,000 acres is a lot of corn. The Osborne spread feeds lots of cattle; but there are other uses for that corn. “So glad you asked!” exclaimed Osborne. “We now have a good-sized bourbon operation underway which can consume lots of corn too! Also, we’re now the number-one producer of hard cider in the state of Minnesota. We make about 20 times more hard cider than we do wine. We mostly use the Budweiser network for marketing our ciders. In Wisconsin, a company called General Beverage does our distributions.”

Making bourbon brings with it a whole set of regulations not encountered with bottling wine. “Two specifics,” stressed Osborne. “It has to be at least 51 percent corn derived; and aged in a new American oak barrel (for at least one day); and averaging 155 proof or less. That remaining 49 percent of your mash can be a mixture. We use barley, some oats, rye, even wheat … including a wheat that produces a cherry-wood smoked flavor.”

Osborne stressed that growing grapes successfully can be a complicated process. “Every couple years we

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analyze our vineyard soils,” he said. “They seldom need extra nitrogen — generally, just a nudging with other nutrients is about all that’s needed. However, fungicides … you need to stay on top of. Mildews, molds, and various funguses seem to thrive in these extra warm seasons. We spray every two weeks once the fungicide season is in action.”

Pruning is essential to a successful grape crop and is done in early spring. “We’re cutting off about 90 percent of the vines’ total weight, so our vineyard looks a bit spindly for a couple months,” laughed Osborne. “But new sprouts regenerate vigorously for the next crop. Extensive pruning is the crux of growing grapes.”

When it comes to the harvest, Four Daughters chooses the hand harvest method over mechanical. But that situation may change. “Mechanical harvest is still mostly new for this region. It takes eight guys and gals about eight hours to hand pick one acre of grapes. So we’re considering hiring a guy with a mechanical rig,” Osborne confessed. “With the mechanical harvester, that one acre takes about 45 minutes. He bought his machine used (new machines

cost about $250,000) from California where thousands of acres of vineyards now get mechanically harvested. But I’m concerned about mechanical damage to the grapes. There’s zero damage when handpicking grapes!” “On average, we yield about 3,500 to 4,000 pounds of grapes per acre; but highly variable by species,” Osborne continued. “Our Marquettes might only do two tons; however, the Briannas get up to 10 tons an acre. A ton of grapes produces about 150 gallons of wine which means about 300 bottles of wine. That tells you the importance of yield. Yes, the Brianna are productive — often producing up to 30-plus pounds per vine!” While Four Daughters has a fellow tending the vineyard, Osborne focuses on the wines and the ciders — plus marketing and sales. “We’re always learning,” said Osborne. “However, I look at it this way: success happens when you are inspired about your work. Whomever we hire brings new skills; so that’s often how I continue learning too.” Four Daughters has a website: www. FourDaughterVineyard.com. Osborne can be reached at (763) 458-3356. v ARC-CO payments unlikely in Midwest

THIESSE, from pg. 12

The benchmark county yield for 2020 was calculated by taking the average county yields for the previous five years prior to 2019 (2014-2018), dropping the high and low yield, and averaging the other three yields.

The 2020 county benchmark revenue for a given crop is the 2020 county benchmark yield times the 2020 benchmark price, which is then multiplied by 86 percent to calculate the “County Revenue Guarantee.”

The county benchmark yields for corn and soybeans in many Upper Midwest counties has increased in recent years, due to fairly strong average county yields from 2015 to 2018. The increased county benchmark yields for 2020 increases the potential for ARC-CO payments. However, that gain has been largely offset by the large reduction in the benchmark corn and soybean price.

The USDA National Agricultural Statistics Service releases the estimated average county yields for corn, soybeans, and other crops in the spring of each year. These are not the final county yields used by FSA to calculate final ARC-CO payments for a given year. However, the NASS yields do give a pretty good indicator of ARC-CO payment potential for a year. Adjustments in final county yields from the NASS yields (which are made by FSA) are usually quite small and many times result in lower final yields than the NASS estimates. This can potentially increase the likelihood or amount for ARC-CO payments in some counties. The 2020 NASS county yields are available on the NASS web site at http://www.nass.usda.gov/

Overall, 2020 ARC-CO payments for corn and soybeans are not likely in many portions of the Upper Midwest, due to 2020 crop yields that were close to or slightly above benchmark yields in many areas, as well as the higher final market year average prices which were well above the benchmark prices for corn and soybeans. There are few counties in central Iowa which were impacted by the derecho storm in August of 2020, as well as some counties in western North and South Dakota which may earn a corn ARC-CO payment for 2020. Virtually no counties are likely to qualify for a soybean ARC-CO payment in 2020.

Looking ahead…

At this point, it does not appear there will be any PLC payments for any farm program commodity crops for the 2021 crop year. All current market year average price estimates are running well above the established reference prices for the same crops. Of course, the 12-month marketing year for 2020-21 for corn and soybeans just began on Sept. 1, 2021. It is early to project corn and soybean ARC-CO payment potential for the 2021 crop year, as lower yield levels in some of the areas impacted by the drought in 2021 could potentially qualify for an ARC-CO payment. Areas with near-average or above corn and soybean yields in 2021 are not likely to see an ARCCO payment for either crop. Any 2021 PLC or ARCCO payments would be paid in October of 2022.

Kent Thiesse is a government farm programs analyst and a vice president at MinnStar Bank in Lake Crystal, Minn. He may be reached at (507) 726-2137 or kent.thiesse@minnstarbank.com. v