From dumping milk to higher prices, it has been a wild year for the dairy industry. But can those higher prices continue into the new year? Farm Journal’s Tyne Morgan dives into the markets in today’s analysis with Scott Brown from the University of Missouri.
Dairy markets have experienced a rollercoaster ride throughout the year. As we close out 2020, producers are eager to hear what the markets will look like for the remainder of the year and going into 2021.
“I’ve had a tough time in dairy markets, cheese markets in particular have been incredibly strong,” Brown says. “I think some of the food box programs that we’ve run have been helpful to the cheese side. I do think pizza demand has been fairly strong in a number of cases as consumers look for ways to find easy, take home meals. So, I think we have seen some strength there, but I would have not suggested cheese prices are where they’re at today. As we go into 2021, I hate to continue to be negative, but I worry about some lower prices happening for dairy producers in 2021. I think just the drag on the economy and whether we can keep this domestic demand going could certainly be problematic. There are opportunities, however, for dairy producers, I think, to lock in some reasonable prices as we go through 2021 right now.”
Over the last few months, whey consumption has increased in China. With this trend predicted to continue, it could be favorable for the U.S. dairy industry.
“I think as we rebuild hog herds in China, that the demand for things like whey are going to continue to go up,” Brown says. “So, export demand could be very strong for us in 2021. And even though we’re going to produce another, I don’t know, a billion and a half, two billion pounds of milk in 2021 relative to 2020, that demand side could continue to carry us. And if it does, it could be another very reasonable year.”
