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Suspension of milk production reports creates multiple voids for dairy industry

March 21, 2013 | 0 comments

A commentary by Ray Mueller, Wisconsin State Farmer correspondent from Chilton.

The announcement last week that the United States Department of Agriculture was suspending the collection and publication of milk production data by its National Agricultural Statistics Service (NASS) was certainly surprising, stunning, and perhaps even shocking.

The last of the reports - at least for this federal fiscal year - was issued on Tuesday of this week.

That information was eagerly awaited by many parties when it was released, usually on the afternoon of the 19 of every month.

Dairy and agricultural sector publications, including this one, depended on it and shared it with their readers. The same was true for farm-oriented broadcast media.

Not having that information easily available at predictable times will leave a void in their coverage and in their assessment of the state of the dairy industry.

Many others in the dairy sector such as processors, organizations, and businesses providing supplies and services certainly were very interested in the milk production, too.

One of the most valuable parts of the milk production report was the single sourcing of lots of information available to anyone who wanted access to it. Sometimes revisions of an original report were made a month later but for the most part the numbers didn't change a lot.

The suspension of the NASS report was triggered by budget sequester under which the federal government is operating through the remainder of its fiscal year, which runs through Sept. 30.

According to one published report, a forced cutback of $5.9 million in spending for gathering data about the production of agricultural commodities (nine others in addition to milk) is responsible for the termination of those programs.

This doesn't mean that there won't be any information about milk production in at least the immediate future. California, for example, is likely to continue providing comprehensive data collected by its Department of Food and Agriculture.

That won't be the case in Wisconsin, however. This was confirmed by Bob Battaglia, the director of the Wisconsin's field office of NASS.

For whatever it might be worth, a long-term suspension of data collection in Wisconsin means it will be very difficult to track how the state's dairy sector is doing to meet the goal set by the Department of Agriculture, Trade, and Consumer Protection and the governor's office of increasing annual milk production to 30 billion pounds by 2020.

With production already having topped 27 billion pounds in 2012 - an increase of just over 4 percent from 2011 even when discounting the Leap Day - the goal will be reached before 2020 if the annual increases continue to run between 3 and 4 percent.

Milk production data will still be available from other sources but certainly not in any convenient or timely package.

For example, the 11 Federal Milk Marketing Orders (FMMO) will continue to disclose the statistics pertaining to the milk, which is pooled in their orders every month.

But there are built-in gaps in the FMMO data.

It accounts only for the milk that is pooled - a percentage that is affected by the monthly producer price differential, which differs in every FMMO.

In FMMO 30, which covers most of Wisconsin and parts of adjacent states, the percentage of milk that is pooled ranges from about two-thirds to nearly 100 percent from month to month.

Another challenge for obtaining Wisconsin data is the fact that two southwest counties are in the Central Order 32. Idaho, which has been third or fourth among the states for total milk production in recent months, is not covered by an FMMO.

The same is true in parts of other states. Each FMMO covers several states, making it impossible to sort out production data by state.

Other possible sources of milk production data could be reports from retailers on fluid milk sales and the monthly cold storage reports for cheese and butter.

Although the latter reports are supposedly mandatory, there have been instances when the parties holding those stocks have not provided the required reports. It is also nearly impossible to link that data to milk production at a specific time or place.

Perhaps the easiest available source of milk production data would be a conversion of the checkoff fees collected by the Wisconsin Milk Marketing Board (WMMB) and similar entities in other states. Again, this would require extensive gathering of information if anyone wanted to compile a national data set.

If, for example, the WMMB received $2.5 million in checkoff fees for a given month, that would convert to milk production of 2.5 billion pounds for the state in that month. Some states collect 10 cents of the 15-cent per hundred mandatory checkoff while others collect 5 cents while the remaining 10 or 5 cents go to the national dairy promotion board.

Putting the scatterings of data into a single package could be an opportunity for someone to track and publish.

The easy way to do this would be to have all milk processors voluntarily report their milk intake but don't expect that to happen in an industry that is imbued with competition within regions and certainly between regions.

There is, however, an opinion in some quarters that dairy farmers and other producers of agricultural commodities would be better off if there were no overall gathering of production statistics by government agencies.

This is rooted in the belief that processors and marketers use that data to their own advantage and against the interest of those who supply the raw product.

One fear of dairy farmers is that the lack of quite reliable milk production data from a single source could hurt milk prices or make them even more volatile. That is a possibility if rumor and opinion take the place of reliable data.

Whoever is correct or whatever is true, it is nonetheless surprising that milk production data was put on the chopping block.

In Wisconsin, at least, that has been a high profile item - much higher than the mid-summer national cattle numbers report, data for mink, production on potatoes, rice, vegetables, and nuts, and commercial fish data.

Because this happened as the result of a political standoff in Washington, DC, the blame for this situation belongs there.

Depending on how valuable this data is perceived to be by dairy and agricultural organizations, they might want to re-examine the criteria on which many of them endorse candidates for national political office.

In the meantime, the frequently stated observation that change is constant, continuing, and fast in agriculture might apply to this situation. But just how this one will play out is anyone's guess at the moment.

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