For me, 2014 was highlighted by time spent with my grandson, Adler. He only says a few words, but he’s reminded me of the three most important things needed in life: a warm bosom, something to drink, and clean, dry pants. After that, things get complicated. Kind of like 2015. Here are five things I think I think about dairy in the new year:
1. It’s the economy. The only thing dropping faster than Class III milk futures in the final months of 2014 was the quarterbacking value of Jay Cutler. Feed prices are down, absorbing some of the margin shock, but have stabilized. Beef prices will continue to provide culling incentive. Fuel prices are down. Margin forecasts are starting to look more like the middle of 2013. We may start to see the intended (and unintended) consequences of the Margin Protection Program for Dairy sooner than we thought.
2. Global questions remain. It is a small world, after all, impacting supply/ demand all the way back to U.S. dairy farms. China may not push its big shopping cart to the market until the last half of 2015. Russia’s import ban is scheduled to end in August, but Rabobank already predicts it will last all year. Prices for oil – Russia’s biggest ruble generator – have tanked.
The European Union is scheduled to lift milk production quotas in April, although Rabobank suggests production increases will be marginal. Don’t look for a Cuba windfall yet.
3. Policy debates rage on. No Farm Bill to worry about, but other policy issues will be front and center. How long have experts been saying “this is the year” for immigration reform? Using my best impersonation of a Harry Caray home run call: “It might be ... it could be ... it is! Holy cow!”
Or maybe not.
Then, there are environmental regulations, starting at the top. EPA’s proposed Waters of the United States (WOTUS) is said to have ag exemptions. I’ll admit to being pretty naive (see Adler’s list), but after approval comes interpretation and implementation, trickling all the way down to your local watershed.
4. Technology drives management. There’s always the danger of relying so much on technology that we forget the basics, but from milking cows to tracking their movement and monitoring feedstuffs, technology is changing the basics. When I talk to dairy farmers, interest in robotic milkers isn’t diminishing. Growing a younger generation of farmers will demand even more technology.
5. Entrepreneurism will be explored. My assistant editor Lucas Sjostrom, whose wife and family have ventured in the farmstead cheese business, suggest it’s more about finding your niche than trying a bit of everything. Can you add value through on-farm processing/ marketing, exporting genetics, changing your production model or scale, or developing some other side business?
Heading into 2015, some of the most time-honored (and time-worn) dairy phrases will get honored (and worn out) some more. Volatility is the rule and change is inevitable. Under those pressures, another time-honored concept should not be forgotten – cows love consistency.
Don’t we all? That’s why I’m getting on the floor to play with Adler as much as possible in 2015, keeping the three most important (simple) things in life within reach.