Early in 2018, as U.S. dairy producers were wallowing in an extended period of low milk prices, expectations were that milk prices would slowly recover through the balance of 2018. Then trade disputes and tariffs through a wrench in those plans, throwing the expectations of a price recovery into limbo.
Manure is a huge problem with it getting into drinking water. That farmer is in Door County and he was “forced” to put in that system by the county. Not some Big Government.
Door County is atop a slab of bedrock called the Niagara Escarpment. There’s no where for manure to go, it has to be treated somehow.
I vacation there. The homes all have storage systems for waste water, and has to get sucked out by a truck once a month or whatever and taken for treatment. There is literally no where for sewage or manure to go because 70 feet of bedrock is just below everything there.
Gawd. That was last year. Says so right there. Do you people even bother to read your own links? What does it say the tariffs are going to do this year?
Relatively slow production growth in the northern hemisphere. USDA pegged July milk production at just a 0.4% growth over July 2017, due to fewer cow numbers and a smaller increase in production per cow than expected.
The herd reduction is an indication of producers selling off cows in a response to low milk prices. “Weak margins early in the year are now showing up in a decline in the dairy herd during the second half of 2018,” Donnay says. He expects the herd to decline a few thousand head per month over the balance of the year.
With regard to production per cow, Donnay says that over the past 12 months milk production per cow has been about 20 pounds per cow below trend. Prior to 2015, Donnay says, production grew at about a 1.5% growth rate. Since 2015, that growth has slowed to about 1%. However, production of milk components continues to grow at a faster rate than trend would suggest. Donnay says that this could be due to a growth in Jerseys and crossbreds in the national herd.
“We have to assume going forward that the growth in production per cow will run at a slower pace than it has historically,” Donnay says. “That slower growth is being made up from a faster growth in component production.”
Domestic demand. A few factors point to an increase in domestic demand. Kids are going back to school, which means more product going into school lunches. Football season is upon us as well, so pizza sales will increase. And the holidays are just around the corner, which will bolster butter demand.
Global demand. Export markets have slowed, with the Global Dairy Trade trending downward 5 times in the last 6 auctions, including down 6% last week. Donnay says major exporters are dealing with weak global demand, particularly from China. Current low prices on the GDT and particularly from New Zealand are likely impacted by the decreased Chinese demand growth.
But at the same time they’re predict slight increase in milk prices.
Even better, China’s appetite for cheese is continuing to grow. Expectations are that the country could become the Number 1 cheese market destination in 10 years—or less, adds Ross Christieson, USDEC business unit director for North Asia.
We will have to wait to 2020 to elect a new President. But I will be voting for a Democrat for Senator later on this year. I recently left the GOP, and I strongly disagree with the Trump tariffs.