🥛 Milk For Days + Potash Paradise, Hemp's Situation, and more...

Good morning.

You could say today’s newsletter is dedicated to the dairy industry.

First, our lead story dives into the world that is all things butter, cream, and cheese. Secondly — and maybe more importantly — we’re celebrating National Dairy Month with a giveaway! See all details on the scroll.

Top stories:

Dairy's Unchartered Territory
'Born in the USA' Potash
Hemp Hindered

P.S. Our referral system got wonky last week with the launch of the new website… so we have a quick favor to ask.

If you referred someone or you were referred to Magnetic in the past 7 days, could you let us know? Simply reply to this email, let us know who you shared with or who you heard from, and we’ll get it fixed.

The dairy industry seems to be sitting at something of a crossroads.

And the proof is in the pudding yogurt.

Let’s talk supply: Total milk output is growing and it’s not showing signs of stopping. USDA data is pointing to 2.4% growth in daily milk output over 2020, thanks to 82,000 more milking cows all producing 1.5% more milk. The growth is even pushing the U.S. cow herd to a size it hasn’t seen in more than 30 years.

Supply is so strong that areas like Texas have more milk than processing capacity. The state’s 1.32 billion pounds of milk had it flying by New York to become the nation’s fourth-largest milk producer.

Nice timing: Demand is also surging to pre-pandemic levels. Increased traffic at foodservice, re-opened schools, and elsewhere have kept dairy farms busy. Plus, you know what else doesn’t hurt? The estimated $500 million boost in dairy exports that the USDA predicts for 2021 over 2020 levels.

But don’t forget… even while Commodity Corner has been pretty red as of late, commodity prices are still relatively red hot. Feed costs for dairy farmers continue to be a big burden of a bill. Economists expect the high costs to last well into 2022.

Where this goes: With all signs pointing to no slow in supply, the pressure will be on the demand side of the equation to find a home for all that extra milk.

Quick Hits

→ Raven flies the nest. CNH Industrial announced a deal to acquire precision ag player Raven Industries for a valuation of $2.1 billion.

→ Rulebook coming for organic farms. The USDA will piece together new regulations for what constitutes animal welfare standards for cattle, swine, and poultry in organic operations.

→ Espresso on the brink. Protests in Colombia have U.S. coffee processors scrambling for supply, and cash markets of the popular arabica beans are up 75 cents per pound.

→ Another vertical farm value play. More greenhouse operations are in the pipeline for indoor ag company Local Bounti, which will go public via a SPAC offering at a $1.1 billion valuation.

→ Australia’s not havin’ it. Producers in the ‘land down under’ are taking their case to the World Trade Organization to fight the 218% tariffs China has placed on Australian wine.

→ Peru’s blueberry cannon. The South American nation jumped to the #1 spot globally for blueberry exports after volume grew more than 12x over the past five years, with 30% growth in the past year alone.

Michigan Potash and Salt Co. (MPSC) in Evart, Michigan will harvest Borgen Bed (rock) 1.5 miles below the surface for the purest potash born in the USA.

What's the big deal? Potash is a crucial fertilizer rich in potassium. The U.S. Department of the Interior added it to the critical mineral list in 2018 because it’s an essential commodity for our nation’s economy and food security.

Oh, and this… Today, 96% of potash for American farms is imported primarily from a combination of Canada, Russia, and Belarus.

Less dependence on foreign potash is key. "One of the world's largest Canadian producers has materially reduced its supply while the pending sanctions on Belarus may further threaten the global food supply chain," said Theodore Pagano, Founder and CEO of MPSC.

He continued, "Potash prices have doubled in the past year, putting pressure on American farmers and a spotlight on national food security."

The MPSC site will be the first new potash plant in the U.S. in 30 years, and the largest in the country, providing 10% of our nation’s supply. Currently, the largest plants are in New Mexico and Utah.

Timeline: Construction on the MPSC plant is slated to begin this fall and will take three years, employing 300 union workers. Mineral rights have already been leased from 450 families.

When MPSC opens in 2024 it will employ 150 full-time employees, while producing 650,000 tons of potash and more than one million tons of food-grade salt. That’s a lot of salt shakers.

Sunset View Creamery’s artisan milk cheese is the result of five generations of dedicated family dairy farming on the same 348-acre farm that has been in the Hoffman family since 1905. For over 110 years, Hoffman Farm has nourished Finger Lakes families with top-quality milk and cheese.

But now, it’s coming to a doorstep near you!

To celebrate National Dairy Month, Sunset View Creamery & Magnetic are teaming up for a giveaway of some delicious dairy favorites.

How This Works

Like our standard referral program, simply use your unique referral link below, and for every sign-up you generate, you get entered to win the Odessa package (pictured above) from Sunset View Creamery!

If you win the package, then we’ll randomly select someone you referred to win the package, too. More shares = better chance of you and those you refer to win!

Your unique referral link:

Get sharing!

*Giveaway ends Thursday, June 24, at noon EST.

When states began legalizing the cultivation of hemp in 2018, many farmers were optimistic. The versatile crop was making waves as the new ‘value-add’ opportunity for traditional row crop farmers.

But producing hemp has been an uphill battle for most.

The issue: Part of the trouble is hemp’s association with its psychoactive cousin – marijuana. By law, hemp has to contain less than 0.3% of THC, the substance that legally kicks it to marijuana status. Plus, hemp has been illegal to grow for the past 80 years. So, it kind of has a bad rap.

But that’s just the beginning. Hemp farming is also complicated by:

Stringent licensing and testing requirements
Difficult registration process
FBI background check

Add in COVID-19, high production costs, and questionable seed suppliers… and the industry isn’t buzzing nearly as much as it was a couple of years ago.

In 2018, it seemed Texas farmers would capitalize on hemp legalization, but it hasn’t caught on quite as expected. The hemp varieties haven’t taken to the climate, and the price is similar to what they can get for cotton – a much more low-key, traditional crop. And crop insurance for hemp is a bit, well, nonexistent.

Meanwhile, in Kansas, the number of hemp licenses issued in 2021 is less than half of the 2020 total.

Unlike its famous cousin, hemp isn’t hitting any highs at the moment.