It's been tough covering the news in this industry over the past two and a half years. Tough economic times have made it difficult on everyone.
But I was inspired in early July when I read a commentary by Michael Marsh, CEO of Western United Dairymen, based in Modesto, Calif. Marsh said he was optimistic about the future for several reasons, including:
• Rising global demand for food.
• A possible end to most of the subsidies for corn-based ethanol.
• Recent events in California, including Gov. Jerry Brown’s veto of card-check legislation that would have given unions more sway over farm workers.
• And, finally, good things come to people who are honest, who work hard, and care for their families.
Gee, I thought, why haven’t I written a similar commentary by now?
I have attended many conferences over the past year where people have commented about the rising global demand for food. In fact, there was a meeting a year ago, sponsored by the chemical company BASF, where I really got fired up and posted a video entitled, “One Hungry Planet.” Then, in March, I had the opportunity to interview Jeff Simmons, president of Elanco Animal Health. Simmons pointed out the challenge of feeding an extra 2 billion-plus people by the year 2050 and suggested that we make good use of technology to get the job done.
I keep hearing these things and, frankly, I am in awe of the farmers who currently get the job done. Those farmers will become even more important in the years ahead.
Food production is a growth industry!
More specific to dairy, we are seeing a huge success story unfolding in terms of exports. Last year, the U.S. exported 12.8 percent of its milk production (on a milk-solids basis), which was a record. So far this year, export volume and value are tracking very strongly as U.S. suppliers continue to respond to strong world demand.
The U.S. is in a prime position to supply dairy products to other countries because of its reputation for quality.
There is much to be optimistic about. Often, it is just a matter of looking.
I am glad that I took this opportunity to look. But Michael Marsh still beat me to the punch.
Note: This was first posted as a commentary on our daily electronic newsletter known as Dairy Herd Network. It’s fun to see what kind of response we get to the daily postings, since our newsletter has a reader-comment section. A commodity manager/market analyst in California, responded that he, too, has been optimistic for a couple of reasons:
• There is an unprecedented opportunity for the U.S. to be a major exporter of dairy products for the next two to 10 years.
• Producers are caught between paying for high-priced forage and high-priced grain, and the fact that many are opting for forage means a less-energy-dense ration, which is why milk-per-cow numbers are growing at their slowest levels in more than two years. It shows that producers ultimately have the power to influence milk prices more than the politicians in Washington, D.C., he added.