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Dairymen fear impact as NASS cuts production reports

Published on March 14, 2013 3:01AM

Last changed on April 12, 2013 11:07AM


Capital Press

Tuesday's announcement by USDA-NASS that it will suspend its monthly milk production reports to meet its requirements under budget sequestration has many in the dairy industry concerned.

Because milk is a perishable commodity, supply data is very important in relation to price. Even small changes in supply can affect price, said Katelyn McCullock, dairy economist with the Livestock Marketing Information center.

"I think it will be difficult to forecast price. We'll be flying blind on production," she said.

Wilson Gray, University of Idaho livestock economist, said the report is used by everyone in the industry, including processors, co-ops and the Chicago Mercantile Exchange.

Loss of the reports will mean there'll be no data on milk production and supply at the state or national level. The price of milk is fairly sensitive to changes in supply, and the industry won't have a picture of that supply, Gray said.

They say the loss will make it difficult for markets to function.

"As we go further down the road, we're going to know less and less about what's going on," Gray said.

Loss of the reports will have an effect on futures markets and where the industry is going as a whole, McCullock said.

The monthly milk production report is one of several reports, including milk disposition and income report and the July cattle inventory report, NASS is suspending for the remainder of the fiscal year.

The problem is there isn't really another objective source for this data.

Some large companies have their own data, but it's specific to their company. The only milk supply data that will be widely available is through Federal Milk Marketing Orders, but those orders don't account for all the milk in the country and don't have a state-level breakdown.

In addition, milk pooled through the orders can vary monthly, McCullock said.

And some states, such as Idaho, don't have a federal order, Gray said.

The monthly milk production report is the most reliable of all dairy production and stocks reports because historically it has been the most accurate, said Mary Ledman, dairy economist with the Daily Dairy Report.

Mary Ledman, dairy economist with the Daily Dairy Report, said it may be possible for Dairy Management Inc., the manager of the dairy checkoff program, to create a proxy milk production report as its funding is derived from every hundredweight of milk produced by dairy farmers in the United States, she said.

Eliminating the report through September will detrimentally affect how decisions are made about marketing milk, starting at but not ending at the farm level, National Milk Producers Federation President and CEO Jerry Kozak, said in a press release on Wednesday.

National Milk contends that dairy is the only major commodity that will be substantially affected by suspension of several NASS reports, and is questioning why USDA choice to suspend an extremely important information tool.

Ledman offers a possibility on that issue.

"If USDA was looking to discontinue a report that would raise the ire of data users and illicit calls and emails to Congress to resolve the budget crisis on a timely basis, the monthly milk production report was a good choice," she said.


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