USDA’s five year census shows more consolidation of dairy herd and tariffs could be coming for dairy products originating out of the European Union. For more on these stories watch the AgDay video above or read the following news brief links.
The 2017 Census of Agriculture from USDA confirmed what many in the dairy industry already knew: there are fewer dairies than there used to be and large farms account for a majority of milk sales.
The data shows that herds with 500 or more cows represent just 8.8% of all herds with milk sales but 68.1% of total milk sales.
The latest census data also shows an overall trend of fewer farms in the U.S. From 2012 to 2017, the total amount of farms fell by 3%. In the past 20 years the number of total farms has dropped by 7.8%.
President Donald Trump is threatening to place tariffs on products originating from the European Union (EU) and this could have an impact on dairy. The possibility of placing tariffs on cheese, butter and yogurt has the potential to be a disrupter in global dairy trade. The U.S. accounted for 16% of the EU’s cheese exports during 2018.
“Theoretically, with lower imports due to the higher total cost, U.S. prices should rise,” says Nate Donnay, director of dairy market insight with INTL FCStone. “The problem is that Europe will still need to do something with that 7,000 to 10,000 tons of cheese which probably means dropping their prices enough to find a buyer on the world market.”