Dairy farming in the summer of 2023 has been extremely challenging. The huge milk price drop of over 30 percent coupled with high feed prices has put a strain on all dairymen. Dairy farmers are resilient, and we will continue.
It looks like we’ve had a great crop year all across the state. There may be some isolated spots that didn’t get the rain, but we’ve had a good season. Plenty of corn silage and hay in storage is a good way to head into winter.
The milk price situation for the past few months has been brutal. Milk checks have been the lowest since Covid in 2020. As I’ve stated in the past, Dairy Margin Coverage insurance payments have been lifesavers. The cost of production has not dropped any this year, while the milk price is $8/cwt lower than a year ago. The payment rate for August covering July milk production is $5.98/cwt, which is the highest rate ever paid. DMC payments cover up to 5 million pounds of production. This a great help to our dairymen who have herds of 200 cows or less but needs to be expanded to cover larger herds. We have many really good herds, over 200 cows in Kentucky, who could use the help. The margin between the all milk price and feed cost will improve going forward and hopefully the increase will be enough to lower the need for the insurance payment.
Federal Order hearings are going full blast in Carmel, Ind. for the month of September. The reason for these hearings is to modernize the milk pricing system. No changes have been made to pricing since 2000 and our markets have changed greatly. There are 22 proposals being discussed. The proceedings are expected to last six weeks. Testimony is being offered by co-ops, producer groups like the American Dairy Coalition, American Farm Bureau and individual farmers. The processor and retail group International Dairy Foods Association also plays a big role in the proceedings, often taking an opposing view to the producer’s testimony.
KDDC has contacts that are closely monitoring the hearings on a weekly basis. Many of the proposals will directly affect our milk checks in the future. The National Milk Producers Federation and American Farm Bureau’s proposals are closely aligned with KDDC’s position. They have the experts and lawyers there every day to represent producers’ interest. The tough part of this proceeding is that it is a long process of implementing any changes. It is estimated it will be the summer of 2024 before the changes take place.
The Farm Bill is also being prepared by Congress. It is still in discussion and appears the present Farm Bill will be extended for some time till the new one is finished. Politics are a challenge. The Kentucky governor’s race is just two months away. It is important, please vote for the candidate who aligns with your values.
The Kentucky State Fair recently concluded with a very large participation of dairy exhibitors showing their animals. The highlight of the fair was the cheese auction at the end of the youth show Friday afternoon. KDDC is the principal donor of cheese and contributor toward the auction. We are joined by over 30 other contributors to make the final price. All the proceeds go to youth who participated in the dairy show and a portion goes to 4-H and FFA programs. There were 43 young exhibitors receiving additional checks over and above their premiums they received in the showring. The cheese auctioned for a total of $23,400. This is a new record and it was a very exciting event. Thank you to all the donors for making this such a special event.
The Kentucky Milk Quality Conference was held in Bowling Green Aug. 28-30. This conference is sponsored by the Dairy Products Association of Kentucky. It is an educational event that brings our processors, inspectors and producers together to discuss milk quality. Our manufacturing industry is essential to all producers and this conference provides the venue for everyone to meet and build relationships.
The KDDC Fall Tour is coming up in early October. We have a great tour planned to the World Dairy Expo in Wisconsin and we will also tour many dairy farms in our travels. I hope many of you can join us.
Thankfully our milk prices have bottomed out and are definitely improving. The future looks brighter, domestic demand for dairy products is robust and milk production is remaining constant. Better times are ahead, so fire up the grill during football season and eat a lot of cheese and pizza.