In your February 10, 2020 issue . . .

DAIRY TRADE RECEIVED A BOOST when the U.S. Senate approved the United States-Mexico-Canada Agreement (USMCA). Projections indicate U.S. dairy exports to Mexico and Canada could grow by $314 million a year. That’s on top of existing annual sales of $2.1 billion.

THE PHASE 1 DEAL between China and the U.S. could be classified as a small step in restoring dairy trade to the world’s largest dairy importer. Dairy exports have been off 47% since China placed retaliatory tariffs on the U.S. To learn more, read the Editorial Comment on page 92.

NOVEMBER DAIRY EXPORTS were above last year’s levels for the third straight month, driven by nonfat dry milk and skim milk powder that were 41% higher than a year ago; cheese exports were up 7%.

THE 2020 DAIRY FORECAST has been rather bright with February to June Class III futures averaging $17.95 and the final six months netting $18.05. Class III is a major metric as 50% of U.S. milk heads to cheese.

USDA WAS SLIGHTLY MORE PESSIMISTIC with a $17.35 Class III and a $16.90 Class IV projection in its latest World Agricultural Supply and Demand Estimates. The agency forecast a $19.25 All-Milk price.

WHILE MANY WORLD ECONOMIES look good, there is some caution as China is facing its worst GDP growth in 30 years, noted Bob Cropp. Europe’s economies are showing slowed growth as well. “Dairy farmers may want to consider protecting some of their milk with dairy futures and options or the Revenue Protection program,” he advised.

FEWER FARMERS SIGNED UP FOR THE DMC, or Dairy Margin Coverage, for 2020. Last year, 23,255 dairy operations elected to enroll in DMC, covering 180 billion pounds of milk. The 2020 DMC enrollment was just 63% of 2019’s enrollment, or 114 billion pounds of milk.

THE DEAN FOODS AND BORDEN BANKRUPTCIES have been especially hard on the Southeast as 18 of the region’s 40 milk processing plants are now in bankruptcy. “The 11 Dean’s plants and seven Borden’s plants account for over half of all milk processed,” said Calvin Covington.

CLASS I PRODUCER MILK FELL BELOW 10 billion pounds in the 10 Southeast states for the first time in recorded history, Covington added. In 2010, Class I milk was over 12 billion pounds. “The future of the Southeast dairy industry is a challenge,” said the longtime milk marketer.

WISCONSIN COULD COMMIT $1 MILLION toward the Wisconsin Initiative for Dairy Exports if the state legislature approves Executive Order 64 during a special session. Governor Tony Evers also called for an additional $1 million for the Dairy Processor Grant program.

AS WHEAT PLANTINGS HIT A 111-YEAR LOW, straw prices continued to be strong at auctions, selling for $165 to nearly $200 per ton in northeast Wisconsin. Minnesota and Pennsylvania quoted similar numbers.

ALFALFA HAY PRODUCTION climbed 4.3% last year. That, however, did not slow hay prices in California and Texas where dairy-quality hay sold for $250 to $265 per ton; parts of Wisconsin were pushing the $300 range.