Last week, I attended an interesting discussion in Washington, D.C., regarding the future of our food supply.
Many people are concerned that there will be enough food to feed a growing world population. The demand for food is expected to grow by 70 percent over the next 40 years, as the population grows another 2 billion and people can afford more food due to higher standards of living.
Several speakers at the conference described agriculture as a huge growth industry, which isn’t surprising given the challenges ahead. Read more.
But, listening to the speakers, there seemed to be a huge disconnect. If agriculture is such a booming industry, why are dairy producers going through tough economic times right now? Did the train somehow leave dairy producers at the station?
We all know agriculture is a cyclical business. There will be ups and downs. Last year was a good year for dairy producers, with record-high milk prices. This year is down again -- and far enough down that it is drawing comparisons to 2009.
How do you explain it?
High feed prices have put many livestock producers at a disadvantage. Yet, it’s time to accept high feed prices as the “new normal” and move on with innovative ways to sell our products to a growing world population.
We need to sell more fluid milk. Fluid milk consumption has declined in the United States pretty much every year for the past 40 years.
We have put forward ideas for reversing the trend, such as encouraging consumers to drink more milk at certain times of the day ― or certain occasions ― when they are most likely to do so. Certainly, breakfast is a good opportunity for promoting more milk.
With all of the research on the benefits of milk as an after-exercise drink for athletes (or even weekend athletes), where is the advertising for that? It was good this week to see that the Coca Cola Co. plans to help promote a new product named Core Power, a post-workout recovery drink made with milk protein ― and Coke’s marketing know-how certainly will help. Read more.
This week, a dairy producer from California called me and said one of the solutions to the fluid milk problem would be to institute a 400,000 somatic cell limit across the United States, which would give consumers better-tasting milk. Yet, certain forces in the dairy industry and regulatory community insist on keeping the legal limit at 750,000.
At some point, we just have to admit that some of it is our own fault.
There are some happy exceptions:
- Exports. The U.S. dairy industry has done a wonderful job in selling products to other countries. Last year, the U.S. exported 13 percent of its dairy production (on a milk solids basis), which was a record-high level and a big reason why 2011 turned out to be such a good year.
- Partnerships with food-service providers, such as Domino's Pizza and McDonald's. This effort by Dairy Management Inc., which manages the national checkoff program, is a much more creative approach to dairy marketing than the generic commercials for milk and cheese back in the 1990s and early 2000s. Read more.
- Efforts to reform the federal dairy policy. Dairy leaders came up with some good ideas that are now included in the Dairy Security Act in Congress. Depending on the outcome of the Farm Bill negotiations this summer, and whether the Dairy Security Act provisions are included, there is hope for bringing dairy policy more in line with modern reality.
Want modern reality? The world population is growing at a fast rate and people will need a safe, nutritious food supply.
It is an opportunity for everyone in production agriculture.