Dairy uncertainty unlikely to ebb soon, report finds Volatility loves uncertainty, and there is no shortage of uncertainty in global dairy markets, according to a new report fromRabobank. heavily, “but a major supply response is unlikely,” the report said.
ZERO ZIP decline inmilk production before “amild recovery” in the second half of the year. Milk prices, like other commodity pric- es, have trendedhigherworldwide.Higher milk prices usually encourage farmers to producemoremilk. But rising production costs, labor shortages, unfavorableweath- er, andvariable feedqualityandpriceswill limitmilk production. Highermilkprices could stopU.S. dairy farmers from culling their herds more
Webinar set on mill assessment The CaliforniaDepartment of Pesticide Regulation will hold a webinar March 30 on a study to review the current mill as- sessment onpesticide products. Thismay include implementing a tiered-fee system or an increase to themill assessment. The mill assessment is a fee levied on registered pesticides at their first point of sale in California. The mill assessment, currently set at 21—or 2.1 cents per dollar of sales—supports thestate’spesticide reg- ulatory program. Under the2021-22 statebudget process, the DPR proposed to increase the assess- ment asmuchas4.5centsperdollarof sale and tier it basedonaproduct’s level of tox- icity.Theagencyarguedthat themillhasn’t been raised in 17 years. It requested an additional 44 positions to be funded with revenue fromthe proposed fee increase. The increase was opposed by agricul- tureandwasn’t adopted.ButDPRreceived funds to contract with the Sacramento of- fices of the Crowe LLC public accounting firmto conduct a study on themill assess- ment andmake recommendations. TheDPRsaidthewebinarwill introduce the Crowe study team, offer a timeline for the project and present details on how in- dividualsandstakeholders canparticipate in the process. A Zoom link to attend the 10 a.m. live webinar may be found at cdpr.ca.gov/ docs/mill/mill_assessment_study.htm. Arecordingwill alsobemade availableon the stateDPR’s YouTube page. cooperativesandprocessorstomanagemilk supplies. These programs could be due to limitedprocessingcapacitybecauseofplant staffingshortagesorlimitedhaulingbecause of driver shortages, the reportnoted. Environmental pressures, labor chal- lengesandongoing inflationcostsalsowill keep U.S. milk production flat or slightly negative through the first half of the year, the bank added. Negativegrowth inU.S.milkproduction would reduce exportable surplus and po- tentially liftmarkets, the report said. Demand for milk and dairy products should rebound more strongly as food service returns from pandemic-related disruptions, Rabobank said. Even though inflationonmilkanddairy productspostedoneof the lowest increas- es, the report warned that “the pain from inflationarypressures couldbecomemore acute this year for consumers, and price sensitivitywill needtobewatched for signs of demand erosion.” Port congestion continues to affect U.S. dairy exports, which dropped 3% in December during peak shipping season. But the bank noted U.S. dairy exports fin- ished last year up11%onproduct volume. Evenwith port congestion improving, the bank warned that “elevated costs and de- lays are likely to remaina factor tocontend with in 2022.”
That’s because U.S. dairies face some additional barriers that could hinder ex- pansion, the bank said. OneislowerU.S.inventoryofreplacement heifers.Some2.84millionreplacementheif- ersareexpectedtocalve thisyear,down3%, according to a January report fromtheU.S. Department of Agriculture. Other limiting factorsare“base”programsimplementedby
The lender noted that even before the Russia-Ukraine conflict, global milk pric- es were soaring due to shorter supplies as major dairy-exporting regions grappled with poor weather or lowermargins. The shortfalls are unlikely to go away, thebank said, adding it expects continued
ZILCH ZIPPO NIL NADA GOOSE EGG BUPKIS Exactly the number of documented cases of resistance in walnuts.
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6 Ag Alert March 23, 2022
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