🐄 Price Check + A Beef Crackdown, Wine's Worst Nightmare, and more...

Let’s just say milk pricing is about as simple as a graduate-level statistics course…

So it was no surprise last month when the National Milk Producers Federation (NMPF) asked the USDA for an emergency hearing regarding milk pricing structure. But - real talk - not all dairy farmers have a “glass half full” view of the proposal.

Refresher: Milk sales are regulated by Federal Milk Marketing Orders (FMMOs) that set milk prices based on the class (intended use) of the milk.

Class I milk prices (the jug in your fridge) are calculated based on the average of cheese (Class III) and powder milk (Class IV), with an added premium.

Enter the ‘rona: COVID-19 messed with the milk market big time in 2020. As cheese prices influenced fluid prices, dairy farmers took the ultimate hit. The NMPF’s proposal seeks to change price structuring...and make up for some 2020 losses.

But some producers are saying, “hold your horses holsteins.”

In a letter sent to Ag Secretary Tom Vilsack, five Midwestern dairy groups put forth their own proposal dubbed Class III Plus.

The Class III Plus crew says that their proposal provides future stability, allows for better risk management, and does not increase long-term consumer prices.

Soundbite: "[The NMPF proposal] attempts to claw back lost revenue in the short term and leaves larger problems unsolved. Our organizations prefer sensible changes that will last for decades," noted Amy Penterman, president of the Dairy Business Association.

Bottom line: The groups aren’t pushing for an emergency FMMO hearing. But if it happens, they say the discussion needs to be broader in scope and “tackle more than just Class I pricing.”

→ North Carolina’s pork pickle. Dueling bills in the state’s General Assembly will either make it easier or harder for hog farms to gain permits for anaerobic digesters that fuel renewable natural gas projects.

→ A prize for a pioneer. Dr. Shakuntala Haraksingh Thilsted was named this year’s World Food Prize Laureate for her work in discovering breakthroughs in fish-based food systems.

→ Cheers to carbon capturing. ADM and the University of Illinois celebrated the successful wrap of a project that captured one million metric tons of carbon dioxide at ADM’s corn processing plant in Decatur, Illinois.

→ A shrinking share for farmers. New USDA data reveals that U.S. farmers now only receive 14¢ per $1 spent on food versus the 17.6¢ share they received a decade ago.

→ Argentina gets beef for hoarding. The South American nation’s top cattle producers are halting all livestock trade to protest the government’s 30-day ban on beef exports in a move to minimize escalating inflation.

→ Methane was born for this moment. New Holland announced their launch of the world’s first 100% methane-powered production tractor that can be fueled by animal waste converted to biomethane.

Cattle groups weren’t messing around last week in Phoenix when they pulled out the sticky notes and started inking a serious industry to-do list.

One of those items being a status update of the Department of Justice’s (DOJ) antitrust investigation into the country's four biggest meatpackers: Tyson Foods, JBS, National Beef Packing, and Cargill.

Congress grabs its megaphone: On Monday, Sen. John Thune (R-SD), Rep. Dusty Johnson (R-SD), and 14 other lawmakers sent a letter to Attorney General Merrick Garland, echoing the industry’s request for continued focus and an update on the investigation that began last May.

While the DOJ was just getting started at this time last year, the USDA released a report in July analyzing the record-breaking spreads seen after the August 2019 fire at the Tyson plant in Holcomb, Kansas, and the COVID-19 plant closures.

Some context: Between 2016-2018, the average spread between fed cattle (producers’ revenue) and the boxed beef cutout value (packers’ revenue) was $21 per cwt. After the Holcomb fire, the spread lept to $67.17 per cwt. And then, in the midst of the pandemic, the spread skyrocketed to $279 per cwt.

While other commodity producers are riding price highs, cattle producers are getting burnt, taking $100-$120 losses per head sold.

Where this goes: An investigation update has yet to be released, but many don’t see a speedy resolution for tough cattle market economics. Noted by Chelsea Good of the Livestock Marketing Association, “The issues in the fed cattle marketing space didn’t show up overnight and won’t get fixed overnight either.”

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What could ruin such a beautiful view as this ↑, you ask? Well...enter the glassy-winged sharpshooter.

They’re savage: The boujee wine and citrus-loving bug isn’t necessarily lovin’ on California’s vineyards. These guys transmit bacteria from one plant to another, leading to fatal plant diseases like Pierce’s Disease (PD) in grapes. In 1999, PD wiped out nearly 60% of vineyards in Temecula, California. Ouch.

Hold the line: In 2019, the USDA kept populations of the pest in check in California with containment efforts. And since they also love citrus, 25,000 acres of citrus trees were treated as part of the program in the Southern San Joaquin Valley.

For over 20 years, researchers have refined treatment programs that kept the pest from moving north and doing more damage.

But then 2020 happened. 2020 had it all. In California, researchers saw an increase in populations of the sharpshooter.

Kern County: From 50,000 in 2019 to 150,000 last year
Tulare County: 10,000 to 30,000
Fresno County: 200 to 1,800

Now this: Even after years of research and containment of the glassy-winged sharpshooter, there’s another threat in town: the native blue-green sharpshooter. Wet, warm winters mean the native sharpshooters could make vineyards their target again, shooting bullets of the disease that comes with them.

While vintners fear the glassy-winged guys, scientists think more resources should go toward battling the blue-green variety.