The slump in dairy farm revenues recognized no borders. That was clear from the data presented at the annual International Farm Comparison Dairy Network conference held in Kiel, Germany in early June, says  agricultural economist Ed Jesse, one of three U.S. representatives at the event.

“The conference began with the sobering observation that 2009 was the worst financial year for dairy farmers across the globe since the network began in 1997,” says Jesse, Director of Trade and Policy
Studies for the University of Wisconsin-Madison’s Babcock Institute for International Dairy Research and Development.

“Preliminary results from representative dairy farms from 45 countries showed that because of much lower milk prices, fewer than half of those farms covered their full economic costs,” he adds. “Those losses occurred despite lower costs of production in 2009 compared to 2008 due to lower feed and energy costs, improved efficiency, devaluation of foreign currencies relative to the U.S. dollar and general belt- tightening.”

Jesse says he sensed that analysts from other countries are more upbeat than their U.S. counterparts. While the rapid recovery of world milk prices that started in the fall of 2009 stabilized dairy farm economics in most countries, the United States, the recovery hasn’t been as strong, he notes.

“Milk prices in the European Union, Brazil and Argentina all have increased more than in the United States,” he says. “They’ve seen a steady upward trend since the beginning of the year. We started out
that way, but our upswing has petered out.”

More information.

Source: University of Wisconsin