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News & Press: Minnesota Milk Minute

Minnesota Milk Minute - May 6, 2016

Friday, May 6, 2016   (0 Comments)
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Minnesota Milk Minute 

May 6, 2016

A reliable source of timely market information, news and current events. 

In This Issue

Minnesota Milk Legislative Update

Last Chance! Join Us on a New York Dairy Tour June 15-20

Wondering Whether and When MPP- Dairy Will Pay?

Keep Your Herd Profitable

Register Youth Now for Gopher Dairy Camp

Apply for Minnesota Milk Scholarships


Upcoming Events

May 9 - New York Tour Registration Deadline

June 15-20 - New York Dairy Tour

Featured Members

Special thanks to
Minnesota Milk
Associate Members.
This week’s featured members:

AgStar Financial Services

Arnold's of Kimball, Inc.

Minnesota Select Sires

Midwest Machinery Company

Modern Farm Equipment

FeedWorks USA, LTD


Stray Voltage Consulting

Minnesota Milk Legislative Update (Daryn McBeth, Gray Plant Mooty and Lucas Sjostrom, Minnesota Milk)

The State Legislature had a relatively quiet week this week – until the Senate’s $1.5 billion bonding bill failed by a vote of 40-26 yesterday on the Senate floor. Bonding bills require a super-majority of three-fifths for passage, thus 41 senators were needed to pass the bill. All DFL senators voted for the bill along with one Republican, Sen. Carla Nelson (Rochester). Republican Senator Fischbach (Paynesville) was absent or did not vote. Republicans objected to the size of the bill as well as some of the priorities and projects within it.

The House is having the reverse problem in finalizing its bonding bill. While no bill has been released yet in the House, reports that it will only fund up to $600 million in capital investment projects has caused objections from minority DFL House members. For passage by the House, the bonding bill needs eight DFL members and all Republicans in order to get to the 81 votes required.

One measure the dairy industry hopes to see in the final bonding bill is $5 million in bond financing to help support upgrades to the City of Litchfield’s electrical power generators. Back-up power generation is critical for the state’s largest cheese plant, First District Association, as it evaluates plans to expand milk processing capacity. First District receives milk from cooperative members in 48 counties across central Minnesota.

Next week the Senate is expected to take up legislation to clarify permitting authority for flex line drag hoses manure lagoon pumpers need to temporarily place along ditch right-of-ways when emptying pits and field applying manure. The need for clarification came to light after passage of a new law last year seeking to grant the Minnesota Department of Transportation express permitting authority for instances when the farmer/field applicator wasn’t necessarily the contiguous landowner of a right-of-way along a state highway from the pumping station to the field.

A bill making appropriations to the Environment and Natural Resourced Trust Fund, as recommended by the Legislative Citizen Commission on Minnesota Natural Resources (LCCMR), is recommending sending $500,000 in what is essentially lottery money to the West Central Research and Outreach Center in Morris. The project, by Brad Heins, assistant professor, would develop and evaluate an integrated system that recycles and uses nutrients in dairy wastewater from feedlots and milk processing, thereby reducing nutrients from agricultural runoff. It also includes outreach on adoption of new technologies.

Next week will be the next-to-last week of the 2016 session, and it is expected to be a busy one. The State Legislature has yet to pass and send to the governor a supplemental budget bill, a transportation bill, a tax bill or the bonding bill – the four main priorities of the session overall. Wide ideological differences remain between minority and majority parties as to taxes and revenue (and the $900 million budget surplus), which continue to impede progress toward an end-of-session global deal.

Last Chance!  Join Us on a New York Dairy Tour June 15-20

Each year Minnesota Milk provides an educational and recreational tour for both members and non-members. This year’s tour includes six days and five nights in the Finger Lakes area and western side of New York State, with stops at dairy farms, state parks, dairy processing facilities, wineries, Cornell University and more! Space is limited to the first 50 people to register. Registration deadline is Monday, May 9. For more information and to register, please visit or call toll-free 1-877-577-0741.

Wondering Whether and When MPP- Dairy Will Pay?

The USDA Farm Service Agency (FSA) Dairy Margin Protection Program continues to be a frequent topic of concern for many Minnesota Milk members. Our Congressional leaders have heard the message from Minnesota Milk and others, with even House Agriculture Committee ranking member Collin C. Peterson (D-7) telling Feedstuffs last week that, “Clearly, it is not adequate right now, and we’re starting to see frustration.”

Minnesota Milk will be closely engaged with legislators on the topic moving forward. In the meantime, there is a tool sponsored by USDA’s FSA and build by the national program on dairy markets and policy – updated daily – to give producers estimates of future payments based on the daily futures price closing.

After clicking “agree” at the bottom of the opening page, the default “MPP” tab provides the probability of the forecast margin on a rolling basis, or you can select coverage to see what likely net results are for your farm, assuming you signed up for the program.

Clicking the “MPP Advanced” tab in the top left corner will alternatively give the projected margin, to the cent, in the bottom row, for each month. Payments are made based on two-month increments, so the margins for March-April ($7.47 + $6.81 = $7.14 average) would trigger a $7.50-level payment, but is preliminary as April’s margin will be projected on May 31. May-June ($6.20 + $6.09 = $6.15 average) would trigger a $6.50-level payment, as of market results from May 5. 

The tool allows producers to adjust milk, hay, soybean meal and corn prices to show how those projections may change based on futures prices changing.

Current payments based on May 5, 2016 projections:

  • Jan-Feb: $8.00928 margin (no payment)
  • Mar-Apr: $7.14 projected ($7.50)
  • May-June: $6.15 projected ($6.50)
  • July-Aug: $6.75 projected ($7.00)
  • Sept-Oct: $7.97 projected ($8.00)
  • Nov-Dec: $8.45 projected (no payment)

John Newton, chief economist with National Milk Producers Federation (NMPF), cautioned that, “With planting and growing season underway a significant amount of uncertainty on potential MPP payments remains.” Newton added that, “While the current program is similar to the initial proposal put forward by NMPF, several changes made to the program for budgetary reasons have reduced MPP’s effectiveness. We continue to work with our dairy farmer member cooperatives, USDA and Congress to make the program a more flexible and effective national safety net for all of America’s dairy farmers.” 

Newton acknowledged that while MPP has fallen short of expectations, “Throughout 2015 and early 2016 the old MILC program would have only paid 2.3 cents per hundredweight in February, 2016 – good for at most $600 per farm.” NMPF has historical MPP prices and other dairy market data on their new economics web page.

Keep Your Herd Profitable (Dairy Herd Management)

With milk prices down, there’s a tendency to cut costs to preserve cash flow. But old economic rules still apply, says Jim Salfer, a dairy specialist with the University of Minnesota, says that with milk prices down, it’s important to remember old economic rules still apply.

“Profit is driven by income minus cost,” he says. So you want to maximize income over feed cost, your biggest expense, so there is income left over to pay other bills. “The reason that high production is so important in increasing profitability is due to dilution of maintenance cost,” Salfer says. It essentially costs the same amount to keep a cow alive whether she is producing 60 lb. or 90 lb. of milk. Read more.

Register Youth Now for Gopher Dairy Camp (Gopher Dairy Club)

Registration is open for the 2016 Gopher Dairy Camp June 12-14 on the St. Paul “farm” campus of the University of Minnesota. The camp is organized by Gopher Dairy Club and the Minnesota 4-H Dairy Project Committee. The goal is to provide dairy youth the opportunity to strengthen their dairy knowledge and skills, as well as to network with other dairy youth that share their interests. The camp is open to youth that have completed grades 6 through 9, but have not yet started 10th grade. The registration fee is $90 and only the first 100 campers will be accepted. Read more or call Nicole Krumrie at 320-296-8603.

Apply for Minnesota Milk Scholarships

Minnesota Milk will be awarding 10 $1,000 scholarships this year to students continuing their education within the dairy industry. At least two of the awards will go to students attending a two-year program. Applications are due Monday, June 20. Read more.

“We would never learn to be brave and patient if there were only joy in the world.” -- Hellen Keller


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