Global Economy

What’s Driving a Better Dairy Outlook in the Second Half of 2026

Tue, 21 Apr 2026 19:59:57 GMT

Milk prices started 2026 on a soft note, but the outlook has improved somewhat as the year has progressed. Futures markets now suggest slightly stronger prices later in the year, offering some optimism for dairy margins.

Still, the improvement is measured. Strong protein demand, shifting consumer habits, global trade dynamics and record beef values are all shaping today’s dairy outlook. Those same forces could also introduce volatility over the next year.

“We have a lot better story to tell today than we did a few weeks ago,” says Kathleen Wolfley, market intelligence director with Ever.Ag. “We’re looking at a market today that is significantly higher than where we were trading at the beginning of the year. Class IV prices are around $19 a hundredweight. Class III prices are around $18 a hundredweight average.”

Even with prices looking a bit better, tight budgets and higher costs are still weighing on dairy demand. During a recent Standard Dairy Consultants webinar, Wolfley and Mike North, president of the producer division at Ever.Ag, gave their take on the current economic outlook for dairy.

A Split Consumer Economy

Energy costs are emerging as one of the biggest economic pressures affecting food demand, particularly for middle- and lower-income households.

“Fuel prices are the top item I’ve been watching here in the last few weeks,” Wolfley says. “I’m in New York, so if I pay over $4 a gallon, it pinches a little bit more than it did back in February when gas prices were in the mid-$2 range.”

But when fuel gets more expensive, family budgets feel it in a hurry.

“In our estimation, it’s costing a family $30 to $40 more per week to fill the tank. That’s basically takeout for a family of four,” Wolfley says. “It’s an easy way to cut back, especially in an environment where folks are feeling pinched.”

The result is a split consumer economy.

“You have some consumers, middle-to-lower income, that consistently say, ‘Hey, I am struggling with affordability,’ versus higher-income consumers that are going to feel the pinch of these energy prices a lot less,” Wolfley adds. “They’ve been absorbing the inflation over the last few years and just kind of taking it in stride.”

That uneven spending environment creates uncertainty for dairy demand.

“I’m a bit concerned about domestic demand here in the U.S. and the ability of domestic demand to recover on the backside of all this uncertainty,” Wolfley notes.

Protein Demand Off the Charts

(Stock Photo)

If one theme defines today’s dairy markets, it is protein. Nonfat dry milk, skim milk powder and whey are increasingly tied to demand for high-protein foods and beverages.

“We’re sitting at $2.06 per pound on the CME nonfat dry milk market, Wolfley says. “That’s a really exciting move, especially for those of you that have a lot of Class IV exposure.”

But the story goes beyond price. Milk solids are increasingly moving into higher-value uses.

“There’s solids now going into cheese production or yogurt production, or into ice cream, or even into the fluid bottle that is no longer making its way into the dryers,” she adds.

Ultrafiltered milk and protein beverages are capturing a growing share of milk solids, pulling more wet solids away from traditional drying channels and into high-protein beverage production. At the same time, U.S. powder markets remain tighter than global supplies, creating added competition pressure for exporters.

“It’s really important to consider that the tightness in this nonfat dry milk market is just a U.S. issue,” she says. “In the rest of the world, they’ve got a lot of supply, and they’re making a lot of powder.”

European milk production rose about 5% year-over-year early in 2026, increasing global powder availability. With U.S. powder priced 50¢ to 60¢ above global competitors, export buyers may start looking elsewhere.

“If you’re a buyer in Southeast Asia, why would you go to the U.S. for your nonfat dry milk or your skim milk powder needs when you can buy it cheaper out of New Zealand or the EU?” Wolfley asks.

Mexico, one of the largest buyers of U.S. dairy products, may already be exploring alternatives.

“I think those Mexican buyers are now looking at alternate sources to say, ‘Can I get it cheaper out of the EU even with the freight costs? Can I go to the GDT auction and get supply that helps alleviate some of that price pressure?’” she says.

For U.S. producers, that means the current rally in nonfat prices could face pressure if exports slow.

Butter Markets Swing with Global Trade

(iStock)

Butter markets have already experienced volatility this year.

“Butter prices rallied all the way above $2 a pound to begin the month of March,” Wolfley says. “Fast forward six weeks, and we’re basically back to where we were in early February.”

The early butter rally was largely fueled by strong export demand, with significant volumes moving through the CME spot market and a steady flow of fat heading into international channels.

February butter exports totaled about 22 million lb., with a large share headed to the Middle East. But geopolitical tensions quickly disrupted that trade. As exports slowed, more butter stayed in the domestic market.

“I think that does open up more potential that we’re keeping fat in the domestic market that may have otherwise been earmarked for the international space,” Wolfley says.

Even so, retail demand has been strong.

“Butter has been crushing it. Cheap butter has allowed retailers to promote aggressively. To see the four-week average on butter and butter-blend sales up 10% is pretty astounding,” she notes.

Still, Wolfley cautions the Class IV complex faces potential downside risk if powder markets weaken or exports slow.

Cheese Markets Lean on Exports

Cheese markets tell a similar story of volatility and global competition. Wolfley points to how prices dropped sharply earlier in the year.

“We hit sub-$1.30 cheese in mid-January. Sub-$1.30 cheese is pretty dang cheap, especially when you compare it to the $1.70 to $1.80 price points at the end of October,” she says.

Those low prices encouraged stronger demand.

“Low prices tend to cure low prices,” Wolfley adds. “We’ve seen more advertising in food service, more promotional activity in retail and opportunities in the export market.”

Cheese production continues to climb, with February output up 4% compared to a year earlier. At the same time, exports have helped absorb some of that additional supply and keep the market more balanced.

“We shipped 129 million lbs. of cheese in February, 30% more than last year, a record-high volume,” Wolfley says. “At the same time, we’re importing less.”

Exports have become essential to keeping the market balanced.

“It tells me we have to stay competitive,” Wolfley says. “If we want to move that cheese, and the domestic consumer isn’t saying ‘Hey, I want a bunch more,’ it ultimately comes down to staying competitive versus the European mozzarella market.”

Price gaps between U.S. and European cheese have narrowed recently, reducing the cushion U.S. exporters have relied on to stay competitive in global markets. With that spread tightening, the risk of oversupply in the domestic cheese market increases if export demand softens.

“Without a big splash into the international marketplace, we could find ourselves with a lot of product looking for a home,” Wolfley notes.

GLP-1 Drugs Shift Dairy Demand

(Lori Hays)

Another emerging factor shaping dairy consumption is the rapid rise of GLP-1 medications used for weight loss and diabetes management.

“I joke that you can’t talk about dairy now without talking about GLP-1, because I think it is a really important piece of the puzzle,” Wolfley says. “About 12% of U.S. adults are using it today, compared to 6% in 2024.”

These drugs reduce overall food intake, with users typically consuming about 20% to 30% fewer calories, and that shift is starting to show up in dairy demand, particularly across categories tied to indulgence and higher-calorie foods.

“We’re seeing less pizza consumption because it doesn’t sit well with people’s stomachs on GLP-1. We’re seeing less ice cream consumption,” Wolfley says.

But the change is not entirely negative for dairy. Protein-rich foods are gaining traction.

“We’re seeing more cottage cheese consumption,” Wolfley adds. “There’s a big boom in cottage cheese production and investment because of opportunities to hit high protein needs. There’s also growth in yogurt and whey protein.”

The shift may ultimately move dairy demand away from indulgent products and toward nutrient dense, protein-focused foods.

Milk Production Expands

At the same time demand patterns are shifting, milk production continues to grow.

“We’ve asked for more milk in terms of processing,” Wolfley says. “We’ve added a lot of capacity in a short amount of time here in the U.S. — about $11 billion worth of investment expected between 2025 and 2030 — and producers have responded.”

U.S. milk production rose nearly 3% in February, showing continued strength in output as the year gets underway. Cow numbers are also increasing, up about 211,000 head year over year, signaling ongoing herd expansion across the industry. At the same time, productivity continues to improve.

“Every cow that’s out there is making more milk today than she was last year and the year before that, and she’s making more components,” Wolfley says.

Advances in genetics and feeding strategies are pushing component levels higher across the U.S. dairy herd. As a result, Wolfley has adjusted her production outlook, reflecting stronger-than-expected gains in milk output potential.

“If you’d asked me this question at the beginning of January, I would have said we might see contraction by the end of 2026,” Wolfley says. “I’m singing a little bit of a different tune today. I expect around 1.5% growth in milk production in 2026 compared to 2025.”

Beef-on-Dairy Income Remains Strong

(Wyatt Bechtel)

Strong beef markets have added another layer to the dairy profitability picture. What once served as a modest income source has grown significantly.

“The more crowds of producers I get in front of, the more I hear how important beef revenue is to the operation,” North says. “This went from casual spending money to something that’s much more substantive and really a big part of the overall profitability picture on a dairy.”

Revenue from beef-on-dairy has increased sharply.

“From late 2022, we estimated revenue on a per hundredweight basis of beef to the bottom line of about $1 to $1.50. Today, that number has grown to anywhere between $4.50 to $5,” North says.

Day-old beef-on-dairy calf prices reflect the strength of the market.

“Recently reported numbers coming in from out of the East Coast show $1,700 for a wet calf,” North says. “It seems insane, but the market has been going up for the better part of three and a half years.”

These high prices are sending a strong message to producers, pushing them to take a closer look at how beef-on-dairy plays a role on their operation.

“If you aren’t addressing beef prices in your operation right now, what are you waiting for? These prices are called record prices because we don’t get to touch them very often,” North says.

Managing Risk in a Volatile Environment

Feed markets add another layer of uncertainty. Large U.S. crops could keep pressure on corn prices, but geopolitical events and energy markets continue to create volatility.

For dairy producers, it’s another reminder to keep an eye on risk.

“There are plenty of headwinds that crude oil prices bring into our economy,” North says. “GLP-1s are real. We see big growth as we come through 2026. It’s going to create domestic headwinds for demand that we may not fully understand yet.”

Even with those challenges, the outlook for margins is cautiously optimistic.

“We are cautiously optimistic about margins as we look at the 2026 year,” North notes. “But we cannot overlook managing the risk around strong beef and dairy prices. The bottom line is: manage risk. It’s too volatile to just leave it to chance.”

An Industry in Transition

Taken together, today’s dairy markets reflect an industry in transition. Prices are improving but remain tied closely to global trade. Protein demand continues to reshape product markets. New consumer trends and medications are shifting how dairy is consumed.

At the same time, milk production continues to expand, beef-on-dairy revenue is strengthening farm balance sheets and risk management tools are playing a larger role in protecting margins.

The opportunity for growth remains strong. But in a market like this, North and Wolfley say it comes down to making the most of the good opportunities while keeping a handle on the risks.

44 Million Acres: The New Frontier of Farm Consolidation and Growth

Tue, 10 Feb 2026 18:01:18 GMT

At the 2026 Top Producer Summit , Farm Journal Intelligence unveiled new farmland insights derived from predictive modeling and deep-data analysis. The research focused on the shifting landscape of land acquisition, identifying which operations are at risk of consolidation, who is positioned for growth and where the most significant opportunities lie.

Here are the six primary findings for farm businesses:

1. Scale Does Not Immune Operations from Consolidation.

(Farm Journal)

While smaller operations face the highest risk — with 58% of small farms “at risk” for sale or acquisition before 2030 — size is not a complete safeguard. Research shows the risk of consolidation or ownership transfer never drops below 27%, even for the largest operations. Furthermore, crop diversity made minimal impact on these odds; the likelihood of transition remains constant whether a farm produces one crop or more than 11.

2. Geography Trumps Diversification.

(Farm Journal)

Regional location is increasingly becoming a primary driver of financial success, often outweighing the benefits of operational diversification. As regional market divides grow, farmers and ranchers are finding that local market conditions and individual circumstances dictate their trajectory more. State-level or even county-level effects are more indicative of their situation than national trends.

3. The 44-Million-Acre Transition.

(Farm Journal)

Nearly 15% of American cropland is projected to change hands within the next three years, driven by generational transfers, continued consolidation and economic pressures. Farm Journal data identifies the Midwest as the epicenter of this shift, with roughly 12 million acres likely to transition. Nationwide, that total reaches a staggering 44 million acres.

4. Mapping the “Sweet Spot” for Expansion.

(Farm Journal)

By plotting cost per cropland acre against the volume of land likely to transition, clear opportunities for expansion emerge. For producers looking to grow their footprint, the most viable opportunities are currently concentrated in Kansas, Texas, North Dakota, Missouri, and Oklahoma, according to this research.

5. Integrity Is the Top Currency in Rental Markets.

(Farm Journal)

When more than 400 landowners were surveyed about tenant selection, integrity ranked as the most critical factor. Interestingly, age was reported as the least important factor. For producers looking to secure rented ground, a reputation for character and experience outweighs both seniority and youth.

6. The “Willingness” Factor in Technology.

(Farm Journal)

Producers most inclined to expand share a common trait: a higher comfort level and rate of adoption with technology. Crucially, this is not necessarily tied to technical skill or existing expertise, but rather to mindset and action. The most growth-oriented producers are defined by their willingness to try new technologies rather than their current mastery of them.

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Atlanta Fed Chair Bostic Recognizes Sectors of Agriculture Are in Crisis

Tue, 10 Feb 2026 00:20:01 GMT

Is an economic crisis brewing in farm country? That’s the question Raphael Bostic, outgoing president and CEO of the Federal Reserve Bank of Atlanta, is watching as balance sheets carry over operating expenses into the 2026 season.

“There’s a lot of distress in agricultural marketplaces and in a lot of our agricultural enterprises,” Bostic says. “I do think there’s a significant crisis here.”

During a fireside chat at the 2026 Top Producer Summit , he recognized the challenges facing farmers in today’s financial environment.

“I get to talk to a lot of smaller family farms and I worry about them, especially because the big operations, they are so large scale, it gives you a diversity of possible strategies,” Bostic explains. “You can tap into different types of credit that can allow you to weather volatility a bit more readily, and we don’t see that for a lot of the smaller folks.”

To help, USDA is set to release $12 billion in “ Farmers Bridge Assistance ” payments toward the end of the month.

“This is a short-run patch on something that could be a long-run problem,” Bostic says.

Rising Expenses and the Growing Debt Burden

USDA is expecting net farm income to be $153.4 billion, which is down $4.1 billion from 2025. Economists say this year’s latest outlook continues to reflect declining receipts and an ongoing reliance on help from the government, which is expected to increase by 45% in 2026 alone.

“Total production expenses are forecast to increase almost $5 billion or 1%,” says USDA economist Carrie Litkowski. “On the farm sector balance sheet, assets, debt and equity are all forecast to increase.”

The latest Purdue University - CME Group Ag Economy Barometer in January found 21% of farmers surveyed expect their operating loan to increase over a year ago. Of those, a third say it’s because they’re carrying over unpaid operating debt from the prior year. In 2023 that number was only 5%.

“We know that input prices for a host of products are up,” Bostic says. “We know that competition at a global level is up. We know that the tariffs have put tremendous pressure on the competitiveness of American products overseas because of those dynamics, and we also know many commodity prices haven’t changed to offset these things. These are all incredibly challenging dynamics to wrestle with, and how we move forward is really an open question.”

Fed Policy: Why Patience is Required for Rate Cuts

The Fed’s primary mandate of stable prices and maximum employment provides an environment with predictable growth, giving people the opportunity to invest for the long haul without having to worry about where the economy will be in five to 10 years.

“First we have to diagnose the problem,” Bostic says. “Is this an issue with labor availability, an issue in new technology or shifting climate patterns, etc., and then we need to think about what strategies will work for all of these new things.”

That mandate requires patience in seeing how current monetary policy impacts the market. Bostic notes inflation remains above the Federal Reserve’s target of 2%, but economic growth has been and will continue to be robust. One thing he’s not advocating for is a continuation of interest rate cuts.

“The government shutdown actually prevented a lot of data from being produced, so it is actually going to make the numbers a bit choppier in the next several months,” Bostic explains. “The usual signals we would get from those [reports] are actually going to be weaker than they would be otherwise. For me, that’s another reason why I think we want to be cautious. We want to be patient, and I think that’ll be prudent.”

Patience ahead of additional rate cuts would allow the Federal Reserve to see how tax cuts and deregulation stimulate growth into 2026 before cutting rates, which could spur inflation even further above the Fed’s target.

At the 2026 Top Producer Summit, Raphael Bostic, president and CEO of the Federal Reserve Bank of Atlanta, joins Bill Watts, Pro Farmer editor, to share insights into the economic forces shaping monetary policy and what that could mean for agriculture.

(Farm Journal )

The ag economy is seeing similar challenges to the economy as a whole. Bostic remarks while the top end of the economy is doing remarkably well, there is a growing number of U.S. consumers who are living paycheck to paycheck, evidenced by the increased rhetoric around a K-shaped economy. That has made itself evident in the ag economy by higher consolidation, with big farms getting bigger and smaller farms going out of business.

“This economy has continued to perform well at an aggregate level; consumers have continued to be resilient, and that’s a good thing,” Bostic says. “My outlook is that the resilience we’ve seen for much of 2025 will continue into 2026 and might even get a bit stronger, so we might actually see some of the tax benefits, some of the deregulation, those things could actually spur the economy to do even more than what it did last year.”

Consolidation and the Transformative Potential of AI

The latest red flag, a sluggish labor market has Bostic waiting on data and wondering if technology or AI are having an outsized role in the current new-hire economy.

“When you think about AI, for example, and those technologies, businesses are experimenting with ways to have AI introduced into their production processes to allow productivity that doesn’t require people,” Bostic admits. “You may have heard reports about a lot of entry-level hiring has happened at a much lower pace than it has in previous years. A lot of that is because the promise of AI has folks thinking, well, maybe I don’t need to do those hires, and I can get that same amount of productivity. That’s a structural change.”

From a farming perspective, those opportunities are also presenting themselves. Given the current challenges in agriculture, Bostic says it might be time to look at new ways to build toward the future.

“To the extent that work can be done, that is, generative, without necessarily needing a person to be there all the time, that’s potentially transformative,” Bostic says. “I know the day is long, seasons are hard, and if you can use technology to take two hours out of it that gives you space to do other things. The opportunity there is what do you do with that extra space?”

Celebrating Women Empowerment in the Indian Dairy Industry

Wed, 19 Nov 2025 12:41:43 GMT

In a powerful presentation at the 2025 IDF World Dairy Summit in Santiago, Chile, Meenesh Shah, the chairman and managing director of the National Development Dairy Board (NDDB) in India, highlighted the significant strides India is making in empowering women within the dairy sector. With India being the largest milk producer globally, this advancement is not just about scale but the social transformation it fosters among women in rural communities across the nation.

The Backbone of India’s Dairy Success
India’s dairy industry thrives on a unique small-scale farming system. With more than 230,000 village dairy cooperatives, these entities provide a lifeline to more than 18 million families across the nation. Remarkably, about 35% of cooperative members are women. This representation has grown significantly, with an increasing focus on empowering women to comprise 50% of the total membership.

“Our daily system is different. It’s a small-scale dairy farming system where the production is by masses ... and 92% of the farms have one to four animals,” she says. “It’s actually providing nutrition to the livelihood for the 80 million rural households.”

Catalysts of Empowerment
The cooperative model serves as a potent tool for women’s empowerment, offering them financial independence and authority within their households. With digitalization facilitating bank account accessibility and identity validation, more women are enrolling as cooperative members. These cooperatives collect about 68 million liters of milk daily, with women contributing 24 million liters.

The economic impact resonates deeply. Women now have direct access to earnings, enabling investment in family welfare, such as education, health and better living standards. The empowerment extends beyond economics, bolstering women’s confidence and enhancing their roles as decision-makers in their families and communities.

“The social economic empowerment for the women members is because they get money in their hand, and they have freedom to spend where they want,” she says. “And it’s leading to the improved standard of living, which is providing self-confidence to them, enhancing awareness and also improving the decision-making status of the women member generally in the male dominated society.”

Transformational Stories and Achievements
A study revealed that placing financial resources in the hands of women in dairy farming positively impacts their families’ education, nutrition and health. Women are responsible for 60% to 95% of dairy-related tasks and 50% of decision-making. This involvement not only nurtures their communities but also inspires shifts in social dynamics.

“We also realize that when you put money in the hands of women as compared to the man in the family, the money is better spent,” she says. “It is spent for the education of the family members, marriage of the children or the health or literacy of the family. And today we are experiencing almost one-third of the women they have the economic empowerment and the social recognition because of these efforts made and providing this productive economic engagement to the women in the rural areas.”

Through initiatives led by the NDDB, 23 producer organizations have been established, with 16 exclusively comprising women. These entities manage significant collections of milk daily and have amassed impressive earnings, illustrating the success of these empowerment programs. Additionally, women’s leadership within these cooperatives has been bolstered, with 154 women directors participating in governance.

Recognition and Future Prospects
The impact of women’s empowerment in India’s dairy sector has not gone unnoticed. International recognition, such as the IDF Innovation Award, celebrates these achievements. Figures like Sri Devi, chairman of Srija Producer Organization, exemplify the transformative journey from an ordinary milk producer to a leader, with her daughter now pursuing higher education in the U.S.

Ultimately, the women of India’s dairy industry redefine traditional roles, transforming grassroots production into a globally recognized force. Their stories underscore the broader social impact of economic empowerment and inspire continued support for female participation in this vibrant sector.

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A Glimpse into the Future of Dairy: 5 Key Takeaways From the 2025 IDF World Dairy Summit

Fri, 24 Oct 2025 19:05:57 GMT

The 2025 IDF World Dairy Summit held in Santiago, Chile, offered a platform for dairy leaders and innovators to explore and discuss emerging trends that are set to shape the future of the dairy industry. Here are five key takeaways from this prestigious event:

1. The Rise of Technology and AI
In today’s rapidly evolving world, technology is becoming an integral part of various industries, and dairy farming is no exception. We are witnessing a technological transformation with advancements such as activity monitoring systems, robotic milking and AI cameras. These innovations are not just about enhancing productivity but also about improving animal welfare and creating a more sustainable future. Experts at the summit emphasized the need for standardized digital tools and collaborative approaches. These efforts aim to not only boost productivity but also ensure farming practices are sustainable, promising a bright future for dairy farming.

2. Global Focus on Sustainability
Sustainability emerged as a dominant theme at the summit. The U.S. dairy industry has set ambitious goals for 2050, including achieving greenhouse gas neutrality, optimizing water use and recycling, and enhancing water quality. To achieve these goals, the industry has formed the Net Zero Initiative, a collaborative effort that focuses on research, technology and on-farm pilots to make sustainable practices more accessible. Katja Seidenschnur of Nestlé highlighted customers are increasingly demanding more sustainable products, which creates opportunities for partnerships across the value chain. By showcasing impact results, businesses can support the transition toward sustainability without overburdening farmers.

3. Overcoming Global Challenges
No country is immune to the challenges facing the dairy industry. Issues such as immigration, labor, rising business costs and the declining number of individuals returning to family farms are challenges dairies around the globe must navigate. These challenges necessitate creative solutions and international collaboration.

4. Similarities Across Borders
Despite geographical and cultural differences, there are more similarities than differences in the challenges and aspirations of dairy industries worldwide. Networking and sharing best practices at events like the IDF World Dairy Summit can help create a unified approach to overcoming these common challenges. Krysta Harden, president and CEO of U.S. Dairy Export Council says it will take a collaborative approach to continue nourishing the world.

5. The World Looks to the U.S.
The U.S. dairy industry’s initiatives and innovations are closely watched by the global community. Whether it’s through pioneering sustainability efforts or leading technological advancements, the global dairy industry looks to the U.S. for leadership and inspiration. At numerous farm visits, I witnessed the impact of U.S. genetics into Chileans dairy herds as well as technology and management insights gained from the U.S. dairy industry.

The 2025 IDF World Dairy Summit underscored that while the industry faces numerous challenges, it is also on the brink of exciting advancements. By embracing technology and prioritizing sustainability, the dairy industry is poised to ensure a sustainable and prosperous future.

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The Backbone of New Zealand Dairy: Understanding the Role of Immigration

Thu, 23 Oct 2025 18:37:23 GMT

The New Zealand dairy industry stands as a pillar of strength in the country’s economy, contributing 45% of the $27 billion in export earnings annually. This sector thrives in part due to the hard work of a diverse workforce, much of which comprises international workers who play an indispensable role. Jane Muir, people team leader from New Zealand Dairy highlighted at the 2025 IDF World Dairy Summit in Santiago, Chile: “New Zealand dairy survives and thrives because of our efforts and immigration.”

A Growing Workforce Challenge
New Zealand has a total on-farm workforce of 41,000 people, Muir says, with 60% of those being employees and business owners.

“Importantly, 36% of the total want to continue to grow,” she says.

New Zealand’s dairy sector faces a pressing workforce challenge. Primarily located in rural areas, where population growth lags even further behind, it becomes essential to rely heavily on immigration to fill the gap.

“Most working-age people want to live in the cities,” Muir says, which leaves rural sectors with limited domestic options.

Immigration as a Key Ingredient
Immigration has been a critical pathway for sustaining and propelling the industry forward. Without it, farms might struggle to maintain operations due to a shortage of manpower. The talk emphasized the goal is not just to fill roles temporarily but to create workplaces and jobs that are desirable to locals equally.

“The birth rates in rural New Zealand are even lower, and there’s so many career choices available to our young people today,” Muir says. “So, the role of immigration in New Zealand dairy industry is important, critical even, to keep our farms running. Without immigration, we would be struggling.”

New Zealand Dairy and its partners are investing in initiatives to attract, grow and retain talent. They aim to reach a point where the dairy industry can thrive with local workers. Meanwhile, immigration provides essential support, allowing the dairy industry to continue growing and evolving.

“Our focus is very clearly on ensuring we have great jobs and great workplaces so that we can attract and retain great people; great jobs and great workplaces will be there for all people no matter where they originated,” she says. “It benefits everyone, and it is also the right thing to do. Dairy New Zealand and our partners focus our energy into a large range of initiatives to attract, grow and retain people.”

Pathways to Prosperity
The New Zealand dairy workforce benefits from an inclusive immigration policy with multiple visa types facilitating this influx. Muir explains how most international workers start at the farm assistant level, gradually progressing to roles like herd manager, assistant manager or even farm manager, depending on their skills and attitudes. These pathways ensure workers are not just fillers of temporary gaps but active participants in the growth and innovation of New Zealand dairy farms.

“Almost everyone on a New Zealand dairy farm starts their career as a farm assistant, and how far people progress depends on their skills and attitude,” she says, noting that to be a business owner, this green New Zealand pathway requires being a New Zealand resident.

Success Stories
Muir shares personal stories of Karolina and Marcelo, and Summit and Manoj who epitomize the opportunities available in New Zealand’s dairy industry. They arrived on short-term visas and progressed through hard work, eventually owning their farms. Such narratives emphasize what’s possible with dedication and the right opportunities, showcasing the value of maintaining open pathways for both immigrants and locals.

Challenges and Opportunities
Every opportunity comes with its set of challenges. Immigration policies often shift with political changes, creating uncertainty. Nonetheless, diversity within the workforce brings innovation and resilience to the dairy sector. Muir also highlighted communication challenges, noting the importance of supporting international workers’ English proficiency.

“Once people start working on a New Zealand dairy farm, they experience a great job and a great workplace. Those are the things that we’re committed to,” she says. “Because while immigration is not our focus, the New Zealand dairy sector is better and brighter because of our international team.”

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Navigating the Global Dairy Industry: A Resilient Journey Through Uncertainty

Mon, 23 Jun 2025 17:25:24 GMT

In the ever-evolving dairy industry, navigating through challenges and opportunities requires keen insight and strategic foresight. Amid global chaos, factors like bluetongue, avian influenza, H5N1 and foot-and-mouth disease, the dairy sector continues to demonstrate resilience.

Mary Ledman, dairy global sector strategist for Rabobank, recently shared a perspective on the current state of the global dairy market. As she collaborated with Rabobank’s team of six analysts from around the world to compile their second-quarter dairy report, they found themselves pondering the question, “Is this too good to be true?” Ledman says three clear messages stand out from the report.

1. Steady Supply in Turbulent Times

Despite an array of factors impacting milk production, cows continue their steady output.

“It’s not huge growth, but nevertheless, we’re moving forward,” Ledman says. The report showcased that 2025 will mark the first year of milk production growth for the U.S. since 2021.

Supply growth has been muted and manageable, yet the outlook is positive, with projections for more substantial gains in milk production.

“Although in the second half of this year and into 2026, we see more positive gains in milk production,” Ledman says.

2. Evolving Consumer Demand

Retail dairy prices saw deflation around the globe in nearly all regions during parts of 2024. However, higher milk and dairy product prices in the second half of 2024 have continued into 2025, which has translated into higher prices for the consumer at the retail and food service outlets. In the U.S., restaurant traffic declined for the eighth consecutive quarter, with a 7% year-over-year drop in the first quarter of 2025.

While consumers around the world face tightening budgets, the demand for dairy persists. However, consumption patterns are shifting. Whereas pizza delivery might be declining, there’s an increasing tendency to dine at home, where milk serves as a staple on the table. Such resilience speaks volumes about dairy’s enduring appeal.

3. Dynamics of Global Dairy Trade

The global dairy trade is not without its disruptions, particularly with the uncertain on-and-off tariffs. Some dairy exporters, including those dealing in butter and cheese, have strategically front-loaded their products into markets like the U.S. in anticipation of increased tariffs. Similarly, China, a significant market for whey ingredients, saw a surge in imports during the first quarter. Nevertheless, by April trade figures had dropped dramatically.

The U.S.-China tariff escalation was paused May 12, with China’s retaliatory tariff dropping from 125% to 10%. The cool-off period is for 90 days. Despite these fluctuations, there’s an optimism for a rebound in trade volumes as new opportunities emerge.

Balanced Perspective Amid Chaos

Despite global chaos, the dairy industry has managed a good supply-demand balance.

“As things calm down in the second half of the year, we could see improved consumer optimism, potentially bringing more traffic to eating establishments and boosting dairy sales,” Ledman says

The expansion within the U.S. cheese industry, which is part of an $8 billion-plus investment in processing, focuses on strategic and rational expansion plans, underscores a robust market driven by genuine demand. Ledman says that with investments in facilities to cater to this demand, the environment for U.S. dairy appears promising.

This expansion also highlights the increasing role of privately held companies in meeting product demands — a shift from cooperative-lead expansions prevalent in the past.

With targeted strategies, the U.S. now stands as a front-runner in exporting competitively priced butter and cheese, leveraging price advantages on the global stage.

While China might not hold the same allure for certain dairy imports, its modernization and enhanced dairy self-sufficiency mark a significant shift in global trade strategies. China’s dairy herd totaled 1.49 million head in 2024, a year-over-year increase of 6%.

Despite gains from large-scale farms, the exit of small-to-medium-sized farms is expected to outweigh these increases. As a result, Ledman says that the projection of total milk production in 2025 is likely to decline by 2.8%. As a major buyer of whey products, maintaining good trade relations with China remains crucial.

The interplay between dairy and beef industries showcases innovative alignment with consumer trends and the driving forces of economics. With the dairy sector adapting to meet evolving demands while extending herd lactations, the narrative of growth and sustainability continues.

In a world filled with unpredictability, the global dairy industry’s resilience, adaptability, and strategic foresight suggest a promising path forward for the U.S. dairy industry, laced with opportunities and growth on the horizon.

Your Next Read: A Surge in U.S. Milk Production: Insights to What States Stood Out

Dairy Powers America: New Report Shows $780B Economic Impact

Thu, 12 Jun 2025 15:04:00 GMT

The U.S. dairy industry continues to be a driving force behind the American economy according to the newly released 2025 Dairy Delivers report from the International Dairy Foods Association (IDFA). This biennial analysis reaffirms dairy’s powerful role in job creation, economic output and community sustainability across the country.

The updated report shows dairy supports:

3.05 million American jobs
$197.6 billion in wages
Nearly $780 billion in total economic impact
$83 billion in federal, state and local taxes
$8.2 billion in annual exports

“The data is clear: Dairy runs deep in every community across America,” says Michael Dykes, DVM, president and CEO of IDFA. “From family-owned dairy farms to processors, retailers and community businesses, dairy supports livelihoods, sustains local economies, and delivers real value to the people who depend on it. These numbers reflect more than economics; they reflect the reach and relevance of dairy in the daily lives of Americans.”

Dairy Segments

(IDFA)

As part of the release, IDFA also unveiled a series of graphics highlighting the top dairy economic states. Take a peek at the following:

Dairy Delivers: California

(IDFA)

Dairy Delivers: Wisconsin

(IDFA)

Dairy Delivers: Texas

(IDFA)

Dairy Delivers: New York

(IDFA)

Dairy Delivers: Ohio

(IDFA)

In celebration of National Dairy Month, IDFA is ramping up efforts to share dairy’s story through events, media outreach and social media, making sure both the public and lawmakers see just how much value the U.S. dairy industry brings to communities across the country. Whether it’s supporting jobs, fueling local economies or putting nutritious food on the table, dairy’s impact is everywhere.

Your Next Read: The Kids Aren’t Coming Back to the Farm – Now What?

Economists Fear the U.S. Will See a Recession in 2025, And That Could Eat Into Consumers' Demand for Meat

Fri, 28 Mar 2025 17:56:25 GMT

Consumer meat sales hit record-breaking levels last year. The craze for protein-filled diets has been a storyline that’s helped drive meat demand, which is good news for meat producers. Ag economists warn, however, the major limiting factor for meat demand, and meat prices, in 2025 just may be what happens in the overall economy.

The March Ag Economists’ Monthly Monitor asked economists if they think the U.S. general economy will see a recession in 2025, and 62% said yes.

Recent reports agree with that sentiment, as the Federal Reserve’s key inflation index rose more than expected in February and consumer spending posted a smaller-than-projected increase, according to the Commerce Department. Both could be warning signs of what’s ahead.

As a follow up question, The Ag Economists’ Monthly Monitor survey asked, “In what ways does the U.S. economy impact meat demand in 2025?” Respondents had no shortage of opinions on that.

Here’s a rundown of some of their reactions:

“If real wages fall, there will be a substitution toward other protein/cheaper meat cuts.”
“Slower growth (even if the U.S. does not endure a recession) will reduce consumer willingness to spend, especially at a time when beef prices, in particular, are high.”
“A downturn in economic growth impacts disposable income and should slow animal protein demand.”
“There is a positive correlation between GDP and meat demand, particularly between GDP and higher end cuts.”
“When the U.S. economy is strong and incomes increase, consumers have more disposable income to spend on meat and higher quality cuts of meat. When the U.S. economy is weak and disposable income tightens, consumers may reduce meat in their diet or turn to less expensive meat options.”

Not all economists expect U.S. consumer demand to fall off though, even if the U.S. officially enters into a recession.

“Labor income is growing faster than inflation. Most U.S. firms are profitable - at least as of current earnings reports,” said one economist.

Another shared, “I do think consumer demand will be lower in 2025 than it was in 2024. That being said - 2024 consumer expenditures and demand were a lot higher than I anticipated at the beginning of the year. Two indicators that are showing up, and are unsustainable right now, are reducing savings accounts and increasing credit card debt. I think it leads to slower meat demand in 2025, partially due to lower meat availability and partially due to slowing consumer demand. Notice I said ‘slowing’ consumer demand and not ‘declining/negative’. Demand does not have to decline year-over-year to impact meat prices. Slowing can do the same thing.”

The GLP-1 Effect
What could have an even bigger impact on meat demand, and even more so than inflation and a recession, is the use of GLP-1 drugs for weight loss. GLP-1 drugs not only moderate users’ blood sugar levels, but also affect their appetites by suppressing hunger cravings.

“U.S. consumer preference for meat demand is strong, though I would be paying attention to the growing use of GLP-1s as it relates to all agricultural product demand,” one economist responded.

The good news is studies have shown those who use GLP-1 drugs often crave healthier items and often consume more protein versus unhealthy foods.

Starting From a Place of Strength
Forecasting meat demand in 2025 relies on a number of factors. But a positive trend is how consumers, especially the millennial generation, are buying more meat. As PorkBusiness.com reported this week, consumers are buying more meat than ever. In 2024, meat sales hit a record high of $104.6 billion and total pounds sold increased by 2.3%, which was cited in the latest Power of Meat.

More people want meat today, but economists are concerned any economic pain could eat into overall meat demand.

USDA Prepares to Protect Farmers in a Trade War

Wed, 05 Mar 2025 19:24:04 GMT

As the clock struck midnight on March 4, President Donald Trump’s new tariffs on imports from Canada, Mexico and China went into effect. Almost immediately, global markets started to react, and trading partners retaliated.

While the full economic consequences of the trade war remain to be seen, Secretary of Agriculture Brooke Rollins has promised to have a plan, such as the Market Facilitation Program (MFP), ready for farmers, if needed. In 2019, MFP provided direct payments to producers impacted by retaliatory tariffs, resulting in the loss of traditional exports.

“Everything is on the table right now. Everything. I know that President Trump, whom I speak with regularly, realizes the state of the farm economy in this country,” Rollins said on Sunday at Commodity Classic . “The last time, I know, he pushed Secretary Perdue to ensure we were able to make whole–as best as we could–some of those, and hopefully most of those, if not all, who had been hurt. We’re building the team at USDA to ensure we have the structure and the plan in place to allow us to move very quickly.”

In an interview with Farm Journal at Commodity Classic, USDA Economist Seth Meyer says he has been instructed by Secretary Rollins to be ready for a relief program, and he’s started calculating what possible relief could look like.

“Calculating something right today would not be helpful because we don’t know where we’re going to be, but absolutely, the Secretary instructs: ‘You need to be ready, have your pencil sharpened and have your tools available. Think about how you would proceed,’” Meyer says. “We are ready in that backstop. It won’t be easy. We’ve talked a lot about different countries. We’ve talked about reciprocal trade, but we are indeed sharpening our pencils to be able to do what she’s asked us to do.”

Here are the key details of the U.S. tariffs and retaliation from Canada, Mexico and China.

(Farm Journal)

Canada responded swiftly with plans to impose 25% tariffs on nearly $100 billion of U.S. imports over two tranches. Mexican President Claudia Sheinbaum plans to announce retaliatory tariff and non-tariff measures against the U.S. at an upcoming rally in Mexico City’s central square.

Meyer’s question is, “Can Mexico afford to retaliate?”

(Farm Journal)

As President Trump’s tariffs drew swift retaliation from trading partners, the ag industry was quick to react.

Impact on Farm Machinery
Equipment makers are concerned about the additional duties, especially after a rough year for the industry.

“We have spent decades laying down supply chains across the world. Our industry is global — 30% of all equipment made in the U.S. is destined for export. Canada is our largest market outside of the U.S.,” says Johan “Kip” Eideberg, senior vice president – government and industry relations, Association of Equipment Manufacturers (AEM). “If we want to create more jobs here in America, we need to sell more equipment and that means selling to customers outside of the U.S.”

As detailed in From the Factory to Your Fields: Where Farm Equipment Is Made , the ag equipment manufacturing industry is fully integrated across the three North American allies involved in the so-called “trade wars.”

“Anytime you disrupt those tightly connected supply chains — and tariffs would be a direct disruption — it’s going to have a serious impact on equipment manufacturers and on our farmers,” Eineberg says. “Given that Canada is our largest export market, we’re sending almost $10 billion worth of goods to Canada every year, there’s a lot at stake here.”

In 2018, Eineberg estimates, tariffs on steel, aluminum and farm inputs from China drove up the cost of making equipment in the U.S. by about 9 percentage points.

“Obviously, manufacturers will try to absorb as much of that as they can, but inevitably some of it will be passed down to the consumer, which in this case is our farmers and ranchers,” he adds.

AEM is also sounding the alarm on the compounding effect of tariffs, specifically due to the tight integration of manufacturing cycles on both sides of the border. There are often cases, Eineberg says, where components and raw materials are shuttled three to five times across the border between different factories in the manufacturing process. That means each time a piece of steel or other raw material being manufactured into a component for a tractor crosses the border, the tariffs multiply.

An example of the cross-border journey of one piece of agriculture equipment from raw material to delivery on the farm.

(AEM)

Impact on Rural America and Fertilizer
American Farm Bureau President Zippy Duvall expressed alarm about potential harm to farmers resulting from imposing stiff tariffs on the top three agricultural markets by value for the U.S.

“Farm Bureau members support the goals of security and ensuring fair trade with our North American neighbors and China, but, unfortunately, we know from experience that farmers and rural communities will bear the brunt of retaliation.” Duvall says.

Of note, more than 80% of the U.S. supply of potash , a key fertilizer product, comes from Canada.

“Tariffs that increase fertilizer prices threaten to deliver another blow to the finances of farm families already grappling with inflation and high supply costs,” Duvall adds. “The uncertainty hits just as operating loans are being secured and spring planting approaches, leaving farmers in a tough spot.”

(Farm Journal)

Read: Fertilizer Manufacturers and Retailers React to Trade Tariffs

Impact on Soybeans
During the 2018 trade war with China, U.S. agriculture experienced more than $27 billion in losses, with soybeans accounting for 71% of those losses, according to the American Soybean Association (ASA). Unlike in 2018, farmers are in a more tentative financial situation in 2025. Commodity prices are down nearly 50% from three years ago, while the costs for land and inputs, such as seed, pesticides and fertilizer, are high.

In an ASA statement, it says for years the organization’s farmer-members have consistently maintained their position that they do not support the use of tariffs, which threaten important markets and raise input costs for farmers, as a negotiation tactic.

“Farmers are frustrated. Tariffs are not something to take lightly and ‘have fun’ with. Not only do they hit our family businesses squarely in the wallet, but they rock a core tenet on which our trading relationships are built, and that is reliability. Being able to reliably supply a quality product to them consistently,” says Caleb Ragland, ASA president and soybean farmer from Magnolia, Ky.

Soybeans by far make up the largest volume of ag products exported to China. In 2024, U.S. exporters sent 27 million metric tons of soybeans to China valued at $12.76 billion, according to USDA. Mexico is the second-largest customer for whole soybeans, soybean meal and soybean oil. Canada is the fourth-largest customer for soybean meal.

“Soybean producers face huge, disproportionate impacts from trade flow disruptions, particularly to China,” Ragland says. “And we know foreign soybean producers in Brazil and other countries are expecting abundant crops this year and are primed to meet any demand stemming from a renewed U.S.-China trade war.”

Impact on Corn and Ethanol Demand
Market analysis shows tariffs won’t solve the U.S. trade deficit and instead will just shift business to other countries, says Neil Caskey, CEO, National Corn Growers Association (NCGA).

“We issued a study back in the fall that documented the implications of tariffs and specifically retaliation in a trade war — it’s not good for corn farmers, farmers in general,” he says. “We did that in conjunction with the American Soybean Association, and it concluded a trade war is really only good for Brazil, and we hope to avoid that.”

The top two destinations for corn and ethanol are Mexico and Canada. According to Krista Swanson, chief economist, NCGA, 40% of U.S. corn exports go to Mexico and more than 40% of U.S. ethanol exports are shipped to Canada.

“[Corn] is a commodity [those countries] consume way more than what they produce, so they’re going to have to get it from somewhere,” she says. “There’s definitely some concern about losing corn [exports], but how much is lost is left to be seen because it depends on what happens with shifting trade flows.”

Impact on Beef and Pork Sectors
U.S. meat export could be impacted by the tariff war as well, with China singling out pork and beef for a 10% counter tariff. Mexico, China and Canada accounted for 8.4 billion in U.S. red meat exports last year, according to the U.S. Meat Export Federation (USMEF).

USMEF is disappointed no agreements were reached to avoid or postpone the tariffs, but president and CEO Dan Halstrom says just because there are tariffs, doesn’t mean trade will stop.

“I do think the thing that we have definitely in our favor is that demand for our products globally is record breaking. I mean, it’s as good as I’ve ever seen it in 40-plus years,” he says. “I think that we have a very unique product. We got to keep that in mind because that’s a big leverage point.”

Halstrom says it could be a bumpy ride for a while, but it’s not something exporters can’t overcome.

Read: Industry Comments on Retaliatory Tariffs on U.S. Pork and Beef

China Hits U.S. Agriculture, Says It Won't Be Bullied by Fresh Trump Tariffs

Tue, 04 Mar 2025 16:28:54 GMT

China retaliated swiftly on Tuesday against fresh U.S. tariffs with hikes to import levies covering $21 billion worth of American agricultural and food products, moving the world’s top two economies a step closer towards an all-out trade war.

Beijing also slapped export and investment curbs on 25 U.S. firms, on grounds of national security, but, unlike when it retaliated against the Trump administration’s February 4 tariffs, this time avoided punishing any household names.

“Trying to exert extreme pressure on China is a miscalculation and a mistake,” a foreign ministry spokesperson told a press conference in Beijing, adding that China had never succumbed to bullying or coercion.

The latest retaliatory measures came as the extra duty of 10% U.S. President Donald Trump threatened for the world’s second-largest economy took effect at 0501 GMT on March 4.

That makes for a cumulative 20% tariff in response to what the White House considers Chinese inaction over drug flows.

China has accused the White House of “blackmail” over its tariff hike, saying it has some of the world’s toughest anti-drug policies.

Analysts say Beijing still hopes to negotiate a truce on tariffs, deliberately setting its hikes below 20% to leave its negotiators room to hash out a deal, but each escalation reduces the chance of a rapprochement.

“China’s government is signaling that they do not want to escalate,” said Even Pay, an agriculture analyst at Trivium China.

“It’s fair to say we’re in the early days of Trade War 2.0,” Pay said, adding there was still time to avoid a protracted trade war if Trump and Chinese President Xi Jinping were able to strike a deal.

Later on Tuesday, China said it would investigate U.S. producers of a type of optical fibre for circumventing anti-dumping measures, suspended the import licenses of three U.S. exporters, and halted China-bound shipments of U.S. lumber.

Additional Levies to Hit About 15% of U.S. Exports

The new U.S. tariffs represent an additional hike to pre-existing levies on thousands of Chinese goods.

Some of these products took the brunt of sharply higher U.S. tariffs last year under then President Joe Biden, including a doubling of duties on semiconductors to 50% and a quadrupling of tariffs on electric vehicles to more than 100%.

The 20% tariff will hit several major U.S. consumer electronics imports from China that had previously escaped untouched, from smartphones and laptops to video game consoles, smartwatches, speakers and Bluetooth devices.

China responded immediately after the deadline, with an additional tariff of 15% tariff on U.S. chicken, wheat, corn and cotton and an extra levy of 10% on U.S. soybeans, sorghum, pork, beef, aquatic products, fruits and vegetables and dairy imports from March 10.

The additional levies will hit about 15% of U.S. exports to China or $21 billion worth of trade, according to Reuters calculations based on U.S. census data for 2024.

Beijing also added 15 U.S. companies to its export control list that bars Chinese firms from supplying American companies with dual-use technologies.

It also put 10 U.S. companies on its Unreliable Entity List for selling arms to Taiwan, which China claims as its own territory, although the self-governing island rejects that.

“We’re still on track to 60% (tariffs),” said Cameron Johnson, a supply chain expert at Tidalwave Solutions, referring to Trump’s campaign trail threat.

“At the moment, with 20%, it just barely moves the needle for companies wanting to move potential supply chains out of the country,” he added.

“At 35%, we start to see that companies will start to move or consider other strategies.” China is the biggest market for U.S. agricultural products, and the sector has long been vulnerable to being used as a punching bag at times of trade tension.

Chinese imports of U.S agriculture goods fell for a second year to $29.25 billion in 2024, from $42.8 billion in 2022.

China’s futures markets were steady on the news.

The most actively traded soymeal and rapeseed meal futures in the world’s biggest agricultural importer rose 2.5% on Monday after the Global Times said Beijing planned to target U.S. agricultural exports.

Supply Chain Shifts

Trade tension risks exacerbating U.S. inflation and China’s efforts to ensure a durable post-COVID economic recovery, which has been heavily reliant on exports.

On Tuesday, the U.S.-China Business Council (USCBC) applauded Trump’s goal of tackling illegal trade in fentanyl, but said raising tariffs on Chinese products was not the way to achieve that goal.

“Across-the-board tariffs will hurt U.S. businesses, consumers, and farmers and undermine our global competitiveness,” its president, Sean Stein, said in a statement. All the same, the China-U.S. trade war could benefit third countries.

Since the United States and China imposed tit-for-tat tariffs during Trump’s first term, Beijing has moved to cut its reliance on American farm goods by spurring domestic production and buying more from countries such as Brazil.

U.S. agricultural exporters could also step up efforts to replace the China market by shipping more to Southeast Asia, Africa and India.

“Chinese tariffs on U.S. wheat and corn imports should be supportive for demand for Australian wheat and barely exports,” said Dennis Voznesenki, an analyst at Commonwealth Bank in Sydney.

“However, China’s recent slowdown in imports of feed grains from all origins should temper the excitement.”

(Reporting by Joe Cash, Mei Mei Chu and Nicoco Chan; Additional reporting by Ethan Wang, Qiaoyi Li, Ellen Zhang, Lewis Jackson and Ella Cao; Editing by Christian Schmollinger and Clarence Fernandez)

USDA's Rollins: 'Let's Go Barnstorm The World And Find New Partners' For Trade

Tue, 18 Feb 2025 18:25:26 GMT

On Brooke Rollins’ first full week on the job as Secretary of Agriculture, she addressed the 600 farmers, ranchers and industry leaders in Kansas City for the 2025 Top Producer Summit.

High on Rollins’ list of priorities was the topic of trade and President Donald Trump’s vision for U.S. agriculture moving forward.

While Rollins did not shy away from addressing the administration’s decision to implement trade tariffs, noting “farmer and rancher concerns are legitimate,” she focused on what she sees as her role ahead.

“My job is to ensure that as President Trump and our trade representatives are making their decisions that I am in the room and advocating on behalf of our people, on behalf of all of you,” she told Top Producer Summit attendees.

One of her key objectives, she says, is to find and expand market access for U.S. agricultural products domestically and abroad.

“Let’s go barnstorm the world, and let’s go find some more trade partners and access [to market opportunities],” she says.

Rollins says her goals for trade are a reflection of Trump’s vision and his determination to make agriculture part of the “golden age” he sees ahead for the U.S.

Trump is the consummate deal maker, Rollins notes, able to side-step bureaucracy and red tape in the process to work with world leaders.

“I don’t know that in the last 250 years, we’ve had anyone in office like President Trump,” she says. “He is a very unusual, remarkable and fearless man, and he wants to make a deal, and in the best way, and put America first.”

Agriculture Secretary Brooke Rollins spoke to a crowd of 600 farmers, ranchers and industry leaders at the 2025 Top Producer Summit.

(Jim Barcus)

Making Headway With Trade
Sen. Roger Marshall of Kansas, who moderated the conversation with Rollins, highlighted Trump’s work to build trade during his first term.

“He redid USMCA, and now that’s our largest ag partnership, with Mexico and Canada,” Marshall says. “He gave us South Korea and Japan, which has been so important to Kansas and our cattle industry, as well as trade 1.0 with China.”

Marshall then mentioned the headway he believes Trump and team have made with India.

“I see India replacing China as our major trade partner, as well that China is growing right now,” Marshall says. “I think there’s huge opportunities in India.”

U.S. ethanol, cotton and tree nuts are three of the top agricultural exports to India, a country that has in the past impeded agricultural trade with tariffs and non-tariff barriers alike. Trump called out the barriers to trade following recent conversations with India’s Prime Minster Modi.

A joint statement after the Trump-Modi meeting said Washington welcomed New Delhi’s recent steps to lower tariffs on select U.S. products and increase market access to U.S. farm products, while seeking to negotiate the initial segments of a trade deal by the fall of 2025.

Rollins says the progress underway with India was just one step forward to address what she described as a trade crisis for the U.S.

“Our exports are down $37 billion this year and likely to be down $42 billion in the months to come. This is a crisis, and this is something that I understand inherently,” Rollins says.

“We have a tremendous amount of work to do,” she adds. “But my promise to you is this, and my commitment will never waver, that every minute of every day for the next four years, I will do everything within my power with hopefully God’s hand on all of us and our work to ensure that we are not just entering the golden age for America, as my boss, President Trump, likes to say, but that we are entering the golden age for agriculture.”

Secretary Rollins joined Chip Flory on AgriTalk. Listen to their discussion about trade policy and tariffs; avian flu; and disaster and economic aid.

Your next read: Senate Overwhelmingly Confirms Brooke Rollins as 33rd Secretary of Agriculture

What We Learned in 2024: The U.S. Dollar Matters, A Lot

Fri, 03 Jan 2025 17:47:00 GMT

2024 was full of lessons in the commodity markets. One of the biggest lessons just might be how critical the value of the U.S. dollar can be, according to AgResource Company founder and president Dan Basse. And to start 2025, the U.S. dollar continued its impressive run.

The first trading day of 2025 saw the U.S. dollar reach the highest level since September 2022. Not only does the news mean the Federal Reserve could keep interest rates at elevated levels, but there’s also expectations the U.S. dollar will remain strong this year due to policies proposed by President-elect Donald Trump.

Looking back at 2024, though, Basse says the biggest thing we learned is the U.S. dollar matters.

“Thursday morning, the Russian Ruble was at 115; the Brazilian Real was at 6.21. This is stimulating production around the world outside of the United States. And I think that’s something we really need to understand and learn from going forward,” says Basse. “Our margins are bad in United States. But for Brazilian farmers and for Russian farmers, they are still making money and willing to expand. So, I don’t have any expectations for any supply lever to pull global production back. And I think that’s going to be very important as we look towards the new year.”

Basse points out the Brazilian real was down 23% in 2024, which ranked the worst of all emerging currencies. The ruble was not far behind.

The Real and Ruble rates.

(AgResource Company )

China’s Crumbling Currency

Basse says the other important lesson from 2024 deals with China, and the fact China doesn’t have to come to the U.S. to buy commodities.

“The Chinese really have slowed down their corn and wheat imports this past year. I think that’s important for next year. And for soybeans, they’ve really tapped on the brakes,” says Basse. “With that in mind, I don’t have a demand driver that really keeps markets heading higher for long periods of time outside of weather scares.”

According to Reuters, China’s yuan fell to 14-month lows as worries about the health of the world’s second-biggest economy, as well as the prospect of increased tariffs under Trump. Pro Farmer Washington correspondent Jim Wiesemeyer calls China a major wild card to watch in the new year.

“You have to watch China because they’re flexing their muscles, but they have a relatively weak for them economy,” Wiesemeyer says. “I think that’s part of the problem in their import side. So for China, not only from a market aspect, but geopolitical stance and Taiwan there are concerns.”

5 Biggest Policy Takeaways from 2024

Wiesemeyer provided his list of the top 5 takeaways from 2025 when it comes to policy and politics.

Your Next Read: China 2025: 5 Predications to Watch

China 2025: 5 Predictions to Watch in the New Year

Thu, 02 Jan 2025 16:36:15 GMT

China was plagued with challenges in 2024. From economic headwinds and an erosion of trust to a deteriorating political environment, those struggles in 2024 aren’t expected to be resolved anytime soon.

James Palmer’s analysis in Foreign Policy’s China Brief described 2024 as a “ relatively quiet if depressing year for China .” But Palmer pointed out 2025 could be a lot stormier, especially when it comes to clashes with the U.S.

Palmer outlined five significant trends shaping China in the coming year:

A harsh trade war: With Donald Trump’s second term, his tariff-heavy policy could escalate economic tensions, intensifying China’s manufacturing struggles while leveraging its global supply chain strength.
Brooding public discontent: Amid record youth unemployment and lingering effects of the pandemic, social disillusionment is growing. U.S.-imposed tariffs could become a scapegoat for economic grievances.
Grassroots government crisis: Local governments face crippling debt and revenue shortfalls, leading to withheld wages and corruption. This financial strain could spark unpredictable public protests.
Global opportunities: As the U.S. withdraws from international organizations under Trump, China positions itself as a stable global leader, particularly in U.N. forums.
The PLA on a leash: Military reforms and anti-corruption drives are curbing the PLA’s capacity for adventurism, with a focus on resolving internal issues rather than engaging in conflict.

Bottom line:
Palmer’s insights underscore both the challenges and opportunities facing China in 2025, painting a complex picture of its domestic and international dynamics.

China’s Manufacturing Slowdown in December
China’s manufacturing sector shows slower expansion in December. China’s private Caixin manufacturing purchasing managers index (PMI) indicated continued expansion for the third consecutive month in December, standing at 50.5, down from 51.5 in November. The slower pace highlights the stabilizing effect of Beijing’s recent economic stimulus measures.

While supply and demand improved, the pace of growth in output and new orders decelerated, and export demand remained weak amid global uncertainties. Employment contracted for the fourth straight month, and business optimism waned due to concerns over economic recovery and U.S./China trade tensions.

Experts suggest policies should focus on boosting household income and supporting disadvantaged groups to enhance economic resilience.

Xi Jinping Acknowledges Economic Challenges in New Year’s Address
In a rare deviation from his usual celebratory tone, Chinese President Xi Jinping acknowledged the challenges facing China’s faltering economy during his New Year’s address. Speaking on state broadcaster CCTV, Xi noted uncertainties in the external environment and the difficulty of transitioning economic drivers but urged confidence, asserting, “These can be overcome through hard work.”

The acknowledgment comes as China grapples with a sluggish post-pandemic recovery, marred by a struggling real estate sector and deflationary pressures. Recent government efforts include increased public borrowing, spending, and interest rate cuts aimed at stimulating weak consumer demand.

Xi confirmed that China’s economy grew “about 5%” in 2024, meeting the government’s target, though analysts question the validity of the figures. The Rhodium Group estimated growth closer to 2.4–2.8%, citing the government’s aggressive economic measures as inconsistent with moderate growth claims. The group projects 3–4.5% growth for 2025, contingent on favorable conditions.

Your Next Read: What Impact Will Tariffs Have on Ag Markets and the Broader Economy?

CoBank: Policy Will Shape Rural Economy In The Year Ahead

Fri, 13 Dec 2024 16:35:51 GMT

CoBank has released its 2025 outlook report , which outlines the key themes the organization expects to shape agriculture and the rural economy in the coming year. While there are several factors to watch, they mainly stem from one place: federal policy.

“The environment we enter in 2025 hasn’t fully defined itself yet, but many of the policies proposed by the incoming administration would likely have a negative impact on U.S. agriculture,” said Rob Fox, director of CoBank’s Knowledge Exchange. “Open access to export markets and labor availability are critically important for agricultural producers and processors. Depending on how policy plays out, those two areas could be big challenges in 2025 and beyond.”

As a new economic era begins, here are the six main forces at play:

Threat of A Trade War
A large focus of President-elect Trump’s campaign was on significant import tariffs. While we don’t know exactly what this policy would look like, it is unlikely to produce a positive outcome for crop or livestock producers.

Fox writes, “These policies could achieve some limited objectives, but it is very hard to paint them as anything but negative for the U.S. farm economy.”

If a trade war was to ensue, it could also be very costly for agriculture. A recent joint study by the national corn and soybean associations estimates the 2018-19 trade war with China cost the U.S. a total of $27 billion in agricultural sales to China over those two years.

Export Competition
Alongside the potential for a trade war, export competition from Russia and South America poses another treat.

According to the report, Russia’s currency is weakening - which is expected to anchor global wheat prices and allow Russia’s wheat to be more competitive.

At the same time, Brazil’s currency is also weakening and exports from the country will be cheaper than those from the U.S. This is coupled with the forecast of record South American corn and soybean crops.

With an abundance of soybeans globally, CoBank is anticipating many U.S. acres to shift from soybeans to corn this year as well.

Labor Challenges
Another likely outcome of the upcoming Trump administration is a decreased labor supply.

The president-elect has proposed deportation and reduced immigration, which could negatively impact the dairy, meatpacking and produce industries by causing labor shortages and driving up costs.

Livestock Sector Investment and Growth
It’s not all bad news for the dairy industry, though. According to the report, the U.S. will see an unprecedented $8 billion in new dairy processing investment through 2026 - and some of those plants will come online in 2025.

The livestock sector as a whole is benefiting from low feed costs, and specifically in the beef industry, a reduced herd size is supporting higher feeder and fed cattle values.

The USDA Economic Research Service projects per capita consumption of chicken, beef, pork and turkey to remain stable or grow up to 2% from 2024 to 2025.

It’s important to note, however, there could be retaliation from potential tariffs placed on major dairy export customers such as Mexico and China.

Tight Margins
Reduced income and tighter margins for the crop industry are expected to continue in 2025.

CoBank anticipates input decisions being driven largely by what provides the greatest return on investment, and farmers may look to switch chemicals to generics.

During this time, it will be critical for ag retailers to provide tailored agronomic advice and technical assistance.

Biofuel Uncertainty
On the biofuel front, headwinds are expected to continue into 2025 - with the Trump administration adding more regulatory uncertainty.

Projections of note include:

A modest increase in biofuel production next year, although ethanol supplies will maintain 2024 production levels of 1.05 million barrels per day, according to the Energy Information Administration.
Renewable diesel production capacity will grow just 100 million gallons from 2024 to 2025 to a total of 5.2 billion and remain steady through 2026, according to an updated analysis from University of Illinois.
Federal and state tax incentives and low carbon fuel policies will drive the future viability of sustainable aviation fuel.

To read the full report from CoBank, click here .

Navigating the Climatic and Competitive Landscape of Global Dairy Farming

Tue, 29 Oct 2024 12:11:21 GMT

As global populations continue to rise, with projections estimating a staggering 10 billion people by 2050, farmers worldwide are faced with an immense challenge: ensuring food security for all. This pivotal issue was the focus of discussions at the International Dairy Federation (IDF) World Dairy Summit in Paris, France, where industry experts gathered to share insights and explore solutions.

South America
Marcelo Carvalho, CEO of MilkPoint Ventures in Brazil, shared insights into the transformative landscape of milk production in South America. Brazil, a significant player in the region, contributes over half of South America’s milk supply.

Carvalho highlighted the growth in South American dairy farming over the past decade. In 2010, 60% of farms were producing just 27% of the milk supply. Fast forward to 2023, and we see a shift where 48% of farms are responsible for 13% of the milk supply. Interestingly, a small percentage of farms, those producing more than 10,000 liters a day, now account for a third of the milk supply.

A major hurdle for dairy farmers in the region is the intense climate variability. Extreme weather events, such as the La Niña and El Niño phenomena, alongside severe floods in Brazil this year, pose formidable challenges to farmers striving to maintain stable production rates.

Despite the varied sizes of farms across the continent, there is a notable trend towards larger consolidated farming operations. However, the average farm size remains relatively small, with an average daily production of just 437 liters.

North America
In examining global production growth trends since 2000, Dr. Andrew Novakovic, a professor at Cornell University, shared that North America stands out with a 1.02% per capita production growth. This figure positions the continent as second only to Asia’s impressive 1.95% growth rate and markedly ahead of Africa, at -0.02%, and Oceania, at -3.90%.

Novakovic highlights that the effects of climate challenges may particularly influence growing conditions throughout North America. In Canada, climates will shift as warmer weather patterns move north and west, potentially favoring agricultural production from the Maritimes to Manitoba. Meanwhile, in the U.S., regions will experience their transformations. The southeastern U.S., known for its hotter summer climates, will see these conditions shifting closer to the Great Lakes. Similarly, California’s Central Valley, famous for its Mediterranean climate, may witness such weather patterns moving toward the Pacific Northwest.

Despite these shifts, Novakovic suggests that North America’s dairy production might enjoy certain advantages. The region’s ample rainfall is expected to continue providing benefits, particularly in the eastern half of the U.S. and Canada.

Australia and New Zealand
Australia and New Zealand have experienced divergent, however, similarities in their outlooks, as shared by Joanne Bills, Global Insights Director with Ever.Ag Insights.

Bills noted a few key similarities between the two countries:

Stabilized Milk Production: Both countries focus on higher-value dairy products.
Increased Cheese Production: Australia emphasizes domestic consumption, while New Zealand and Australia both concentrate on exports.
Strong Trade Linkages: Australia’s import opportunities are increasing, reinforcing trade connections.

The impact of climate change on the dairy industries of Australia and New Zealand is significant.

GHG Reduction: New Zealand farmers have the skills and infrastructure to respond to commercial drivers for greenhouse gas reduction.
Policy and Community Pressures in New Zealand: There’s a potential overreaction to policy changes, with strong community pressures remaining.
Australia’s Climate Challenges: Although there’s limited government pressure for change, Australia faces severe climate impacts.

Water policy is a critical issue for dairy producers on both sides of the Tasman Sea:

New Zealand: Restrictions on winter grazing impact production.
Australia: Water scarcity has decreased water availability for dairying in irrigation regions.

European Union
Milica Kocic, Lead Product Development for IFCN Ag, spoke on the shrinking raw milk pool and sustainability constraints facing Europe.

Kocic shares that farm prices in 2022 were profitable, but this comes after multiple years of negative profit. Farmers in Europe are battling for land, with more competition and rising costs. She points out that old farming practices, low efficiencies, and quality issues will force dairies out of business.

Kocic points out that farms with less than 100 dairy cows in countries like Germany are more likely to go out business. While farms with more than 100 cows are not expanding, noting that uncertainty in future policy and regulations plays a factor in farms not growing. The takeaway: policy solutions must be cost-effective to farmers.

Africa
With a varied landscape encompassing 54 countries, Africa’s milk production was estimated at 50 million tons in 2022, a figure representing 5% of global milk production. Despite its potential, the industry faces numerous challenges, as acknowledged by Bio Goura Soule, PAOLOA Coordinator.

As of 2021, Africa’s dairy imports stood at an estimated 5 billion U.S. dollars, reflecting the growing demand across the continent. Production is primarily dominated by two regions: East and North Africa.

Goura Soule highlights significant challenges and constraints impeding the progress of the dairy industry in Africa:

Low Productivity: Predominantly pastoral in nature, dairy cow productivity is notably low in specific regions.
High Costs: The escalating costs of animal feed and healthcare add to the financial burdens faced by dairy producers across the continent.
Collection Difficulties: High atomicity in the supply of local milk, paired with inadequate infrastructure, poses significant collection challenges.
Impact of Imports: Exported powdered milk presents perverse effects, often hindering investments in the early links of the value chain, such as milk collection.
Insufficient Investment: Numerous countries display low or insufficient investment levels in the dairy sector, stifling growth and development.

Efforts driven by the Economic Community of West African States (ECOWAS) aim to address these issues, targeting to double milk production by 2030. Such initiatives hold potential to transform the sector, benefiting producers and consumers alike.

Asia
Li YiFan, Head of Dairy in Asia, points out that China’s raw milk production increased significantly in the past five years. YiFan shares China’s dairy industry revitalization plan that they plan to achieve by 2025:

· Raw milk production: 41 million mt.
· Further reduce feed cost.
· Large-scale farming, >75% farms more than 100 cows.
· Yield per cow: 9mt/year
· Improve cattle breeding capacity
· Support dairy enterprises to build their own farms
· Integration of Dairy farming and processing

Consolidation continues to occur with government support focused on large-scale farming in Asia. However, heat stress is a major constraint impacting dairy in Southeast Asia. Key challenges in that region include market competition, as importing dairy products are cheaper and makes it difficult for local producers to compete against price and quality. Furthermore, local consumers generally prefer imported dairy products.

With the increase in the efficiency of large-scale farming and the integration of dairy farming and processing, China has basically achieved self-sufficiency. Southeast Asia’s hot and humid weather and overly fragmented markets are major constraints to achieving self-sufficiency. Import dependence may be reduced in the future, but self-sufficiency will be difficult to achieve.

India
Sudha Narayana, an associate professor who has written about the history of Indian dairy, highlighted the significant role women play in India’s animal rearing industry, accounting for a substantial 60% of the days spent on this activity. India, renowned for its vast bovine population—which numbers a staggering 300 million and represents 13% of the global count—also boasts 57% of the world’s buffalo population.

Despite the country’s diverse regions, there is a notable upward trend in the number of crossbred cattle, alongside a burgeoning commercialization of the dairy sector. This shift is partly attributed to a continuous decline in the use of draught animals, prompting farmers and industry players to seek more productive alternatives.

Narayana also addressed a significant cultural aspiration within India—a widespread desire for a healthy diet. Yet, this aspiration is often thwarted by economic barriers. More than half of the population finds such a diet financially out of reach, a situation exacerbated by rising milk prices. The cost increase is largely driven by heightened production expenses within the country, thus placing a healthy diet further beyond the grasp of many.

The global dairy industry stands at a crossroads, faced with both daunting challenges and promising opportunities. From climate variability and market competition to policy changes and economic barriers, regions across the globe are navigating under a complex set of circumstances. Collaborative efforts will be vital in securing a sustainable and prosperous future for global dairy production.

U.S. Agriculture Faces Growing Trade Deficit, USDA Projects a Record Ag Trade Deficit in 2024

Wed, 09 Oct 2024 14:17:33 GMT

U.S. agricultural exports were at $13.01 billion in August, essentially unchanged from July, against imports of $17.19 billion, which were down 2% from July, resulting in a monthly trade deficit of $4.18 billion.

So far in fiscal year (FY) 2024, exports total $161.3 billion compared to imports of $188.82 billion, creating a cumulative deficit of $27.52 billion. The sector has recorded monthly deficits in 10 out of 11 months in FY 2024, with three months seeing deficits of $4 billion or more and eight months with a deficit of $1 billion or more.

USDA forecasts agricultural exports at $173.5 billion and imports at a record $204 billion for a projected record trade deficit of $30.5 billion.
In FY 2023, the trade gap was $17.1 billion. Based on the FY 2024 forecasts and cumulative trade data, agricultural exports in September would need to reach $12.2 billion to meet the USDA forecast, while imports would need to be $15.18 billion. Historically, the value of imports has declined in September compared to August over the past three years, while the value of exports fell in two of the last three years, with September 2023 being an exception.

Since U.S. agricultural exports peaked at $196.1 billion in FY 2022, they have dropped by 11.5%. USDA’s forecast for exports of $169.5 billion in FY 2025, if accurate, would represent a 15.4% decline in the value of shipments since FY 2022. Meanwhile, imports have consistently set records in recent years, and in FY 2025, they are expected to rise to $212 billion, nearly 4% higher than FY 2024 forecasts.

This trend continues to fuel concerns in U.S. agriculture, particularly over the lack of new free trade agreements (FTAs) pursued by the Biden administration. FTAs are typically aimed at removing tariff barriers for U.S. agricultural products, which can significantly boost market access for American farmers.

Administration Touts Strides in Beefing Up Ag Trade

Just last week the U.S. Trade Representative’s Office and USDA reported the administration has made significant strides in expanding market access and boosting agricultural exports.

The agencies reported the four-year average of U.S. ag exports is 28.5% higher compared to the previous four years. It says the administration has secured more than $26 billion in ag market access globally. The agencies also added that the peak was reached in 2022 with a record of $196 billion in ag export values.

Officials cited the momentum from several key initiatives, including the “Regional Agricultural Promotion Program” and the
Assisting Specialty Crop Exports Initiative,” along with trade relationship improvements with India,
Colombia and gaining access for U.S. fresh potatoes to Mexico.

Washington watchers say some of the increase in export value may also be attributed to higher prices rather than only increased volumes, pointing the to record ag trade deficit on the books today.

China's Economic Slowdown is Leading to a Major Impact on Global Ag Markets

Mon, 16 Sep 2024 18:29:22 GMT

— China’s economic slowdown is leading to a significant impact on global agricultural markets, as the country’s grain reserves swell and demand decreases, Bloomberg reports . This is causing concern for farmers worldwide, as China has long been a major customer.

The effects are already visible, with declining French barley exports to China and the U.S. struggling to sell corn for the new season. Australian wheat farmers, about to begin harvesting, are likely to feel the pressure as they brace for reduced demand. This downturn could signal a prolonged challenge for global agriculture tied to China’s consumption.

China grapples with oversupply as demand slows.

(Bloomberg )

Meanwhile, Chinese authorities face increasing pressure to accelerate fiscal and monetary stimulus to meet the 5% growth target for 2023, following the longest slowdown in industrial output since 2021. Recent data revealed weaker-than-expected consumption, investment, and a sharp decline in home prices.

The People’s Bank of China signaled its intent to prioritize fighting deflation and hinted at further monetary easing. Missing the GDP target could hurt confidence in the economy, with foreign investors already pulling a record amount of money from China in the second quarter.

Investment banks also cut China GDP forecasts. Goldman Sachs and Citigroup each lowered their full-year projections for China’s economic growth to 4.7%. Weak economic activity in August has ramped up attention on China’s slow economic recovery and highlighted the need for further stimulus measures to shore up demand.

Goldman Sachs maintained its forecast for China’s 2025 GDP growth at 4.3%. Citigroup cut its 2025 year-end forecast for China’s GDP growth to 4.2% from 4.5% due to a lack of major catalysts for domestic demand.

China’s Sow Herd Contracts 5.4%

China’s sow herd stood at 40.41 million head at the end of July, down 5.4% from last year, the agricultural ministry said.

Chinese EVs Still Cheaper than Teslas in U.S. After Tariff Hike

The 100% duty on EVs, announced Friday and set to take effect Sept. 27, follows a four-year review prompted by what the Office of the U.S. Trade Representative called unfair trade practices.

China’s Release of American Pastor David Lin Signals Goodwill Ahead of U.S. Election Amid Strained Relations

China’s release of David Lin, a 68-year-old American pastor imprisoned for nearly two decades on fraud charges, can be viewed as a symbolic gesture of goodwill towards the United States. This action may be strategically timed to ease tensions or improve diplomatic relations between the two nations, especially as the U.S. approaches its presidential election. By making such a move, Beijing could be aiming to soften its image, potentially creating a more conducive environment for dialogue, trade, or negotiation.

Some China watchers say the decision to free Lin might be intended to convey a readiness for cooperation, particularly at a time when U.S./China relations have been fraught with economic and geopolitical challenges, including trade disputes, military posturing, and technological competition. The release could also serve as a signal to the international community that China is willing to engage in diplomacy on certain issues, even while broader tensions remain high.

In First Forecast for FY 2025, USDA Projects A Bulging Ag Trade Deficit to Top $42 Billion

Thu, 29 Aug 2024 14:37:20 GMT

The U.S. agricultural trade deficit is expected to continue growing in fiscal year (FY) 2025, with significant implications for the agricultural sector. USDA provided forecasts indicating that agricultural exports are projected to decrease, while imports are expected to rise, leading to a widening trade deficit.

USDA Raises FY 2024 Forecasts by $3 Billion

USDA raised its forecast for agricultural exports by $3 billion to $173.5 billion, largely due to increased exports of horticultural and grain products.

However, agricultural imports are also expected to increase by $1.5 billion, reaching $204 billion. This results in a projected trade deficit of $30.5 billion, which is a slight improvement from the $32 billion deficit projected earlier in May.

For FY 2024, U.S. ethanol exports are now seen at a record $4.3 billion, an increase of $800 million over the previous year and $400 million higher than the previous record set in FY 2022. USDA said the volume is seen at 1.9 billion gallons with U.S. ethanol “generally more price competitive with Brazilian product, helping to boost global U.S. sales.” But there are essentially no shipments to Brazil due to the 18% import duty. The U.S. supplies all of Canada’s imports with that country being the world’s top ethanol importer.

Canada is still expected to be the top U.S. agricultural export destination in FY 2024 at $29.3 billion with Mexico in the number two spot at $28.9 billion, with China in third at $27.0 billion.

USDA’s FY 2025 Projections

Looking ahead to FY 2025, which begins on October 1, 2024, USDA forecasts a decline in agricultural exports by $4 billion, bringing the total to $169.5 billion. This decline is primarily attributed to lower unit values of key commodities such as soybeans, corn, and cotton, as well as reduced volumes of beef exports. The decrease in exports to China, projected at $24 billion, is particularly notable and is driven by reduced import demand, strong international competition, and lower unit values of U.S. exports.

On the import side, agricultural imports are expected to reach a record $212 billion, up $8 billion from the revised figure for FY 2024. This increase is largely due to rising imports of horticultural products, sugar, and tropical products.

USDA’s initial outlook for FY 2025 anticipates a record agricultural trade deficit of $42.5 billion, up $12 billion from the current fiscal year. This trend reflects ongoing challenges in the U.S. agricultural trade landscape, including strong competition from international markets, fluctuating commodity prices, and changes in global demand patterns.

A factor in the FY 2025 export outlook is the value of the U.S. dollar which USDA expects will increase another 0.8% in calendar 2025 after a 2.2% rise in 2024.

“Labor talks at U.S. ports on the East Coast and Gulf of Mexico are another risk for shippers already grappling with longer transit times and higher costs,” USDA noted.
For FY 2025, Canada retains the top spot with forecast exports at $29.2 billion while exports to Mexico are seen holding at $28.9 billion but China is seen falling to $24.0 billion, still holding down the third spot. “Uncertainty still looms as China’s economy shifts from growth based, mainly on production and exports, to domestic demand with slowing population growth leading to reduced production capacity,” USDA noted.

Bottom Line

With these forecasts, concerns will increase about the outlook for the U.S. ag sector, with the updated U.S. farm income forecast due Sept. 5. It will also continue to generate criticism of the Biden/Harris administration’s lack of new free trade agreements. USDA has introduced the $1.2 billion Regional Agricultural Promotion Program (RAPP) to support and diversify U.S. ag exports, particularly targeting markets beyond the top buyers. While the program aims to expand export markets, its impact on reversing the current export slump remains uncertain in the short- to medium-term.

Your Next Read: More Than 50% of Ag Economists Now Think the U.S. Ag Economy is Already In a Recession

Battle For Ukraine: The Untold Farming, People And Infrastructure Stories From The Front Lines

Fri, 03 Mar 2023 21:50:56 GMT

Dressed in protective gear, Illinois farmer Howard G. Buffett bounced his way across frozen back roads, driving in well-worn tracks along the path to Bakhmut, near the front lines of the war in Ukraine. Even in an armored vehicle, the threats of landmines and munitions were ever present.

“In the first 30 minutes or so, as we were driving in, I started to count ambulances that were coming out,” Buffett recalls. “I lost count at 50.”

(Farm Journal)

As a global philanthropist, Buffett is no stranger to war zones and political conflict. His namesake, The Howard G. Buffett (HGB) Foundation , works across the world in places others can’t or won’t to address food insecurity, mitigate conflict, combat human trafficking and improve public safety.

“If people cannot feed themselves, and they cannot feed their family and a government cannot feed people, it breeds conflict,” Buffett explains. “When Ukraine fails, in terms of their ability to produce agricultural products, the world becomes less safe.”

PRODUCTION PROBLEMS

Prior to the invasion, Ukraine was the world’s biggest exporter of sunflower oil and sunflower meal, the fourth-largest exporter of corn and the fifth-largest exporter of wheat, according to USDA. All told, Ukrainian farmers were growing about 100 million metric tons of commodities.

“Ukraine, no matter what happens with the war, will probably see corn and sunflower production 40% to 50% be-low normal,” says Dan Basse, president of AgResource Company.

Ukraine is also a major wheat producer and global exporter. USDA estimates for 2022/23 wheat production will be down about 40% from a year ago. In the eastern areas where most of the conflict is happening, output will be even lower.

Nick Gordiichuk, a farmer near Kyiv, says winter wheat acres will decrease.

“We’re not sure about the functioning of [the grain export] corridor, and weather conditions weren’t good,” he says. “Many farmers are looking at crops that are easy to plant and do not require much fertilizer.”

(Farm Journal)

WAR ON AGRICULTURE

In the past year, Ukrainian farmers have learned it’s increasingly more difficult to grow, harvest and ship products abroad. From limited and high-priced inputs to a lack of labor, production problems appear to be a reality for the foreseeable future.

“A lot of farmers are fighting on the front line and die on the front line, which has a huge impact on how you continue to function in your agricultural sector,” Buffett explains. “This isn’t just a war on civilians, this is a war on agriculture.”

In 2022, the World Food Program (WFP) calculated nearly 350 million people across 80 countries were acutely food insecure. The war in Ukraine is a significant contributor to the surge in hunger and conflict.

“There’s more conflict in Africa today because there are more hungry people; the war in Ukraine has been a big contributing factor,” says Buffett, who has spent considerable time and resources in Africa.

Traditionally, Ukraine has been a major supplier of grain for WFP and many smaller, less stable countries across Africa and the Middle East. That ability has been severely impacted since the outbreak of war.

For U.S. farmers, it is hard to fathom what has happened to their counterparts in Ukraine, Buffett says.

“There are landmines on hundreds of thousands of acres,” he says. “More than $4 billion worth of commodities have been stolen; there’s infrastructure damaged and 84,000 pieces of farm equipment has been destroyed, and it’s not stopping.”

During USDA’s recent Agricultural Outlook Forum, Mykola Solskyi, Ukraine’s minister of agrarian policy and food said the country’s cultivated areas have decreased by about 25%.

“Farmers sacrifice their lives doing their job,” he says. “There are areas farmers cannot cultivate as a result of the war. A considerable amount of land is polluted with explosives.”

COMBINES IN COMBAT

Nearly every day, Buffett receives a photo of farm equipment destroyed by mortars or landmines.

“They just sent me one of a Komatsu D61 bulldozer that hit a landmine,” he says. “It blew the entire track off and blew out half the undercarriage. Thankfully the farmer was okay.”

That isn’t always the case, which is why his foundation is helping to provide detection hardware and expertise to begin the slow process of demining.

“We spent about $30 million on demining in 2022, and it’s going to go on for years,” Buffett says.

As equipment gets destroyed or stolen, sustaining agricultural production becomes nearly impossible without outside support.

“We were able to get 50 combines into Ukraine in about 30 days,” Buffett says. “The fun part of the story is that al-most all of them were originally destined for Russia.”

(Farm Journal)

Roughly 8 million Ukrainians are now living as refugees in Europe and another 6 million are displaced within their own country, per WFP. At last count, 18 million Ukrainians need humanitarian help with one in three facing food insecurity.

In 2022, the HGB Foundation spent $148 million buying equipment, helping feed people, financing food boxes and providing seeds for gardens.

NEVER AGAIN

Buffett’s foundation is also providing rapid DNA testing equipment and investigative teams to do the hard work of cataloging and recording the lives lost. From bodies buried in rubble to the discovery of mass grave sites like the one found near Kharkiv, the job is endless.

(Farm Journal)

“It’s a solemn experience to walk through a forest with 451 hand-dug graves,” Buffett says. “At one site the team said 70% to 80% of the bodies showed some kinds of torture, many with broken fingers or broken limbs.”

After hearing stories of elderly parents shot by snipers, Buffett knows the consequences and horrors of this war will eventually be uncovered.

“We are not learning from history,” he says. “The Holocaust was never again, and Rwanda was never again yet we are watching never again unfold in front of us.”

2023 AND BEYOND

As the conflict stretches into its second year, Ukrainian farmers are caught in the crossfire. For those who can plant, finding a buyer or processor is still a massive challenge.

A protected shipping corridor is set for renewal in mid-March but has seen a significant slowdown. Meanwhile, pushing crops east to Europe via rail comes with its own difficulties, including different track widths.

It’s why in 2023, the HGB Foundation plans to front $5 million to build new export hubs.

“They want to try to start moving grain in containers because the rail system can move lots of containers, and you can transfer them easily onto European trains,” Buffett says.

This year, Buffett says his goal is to spend $300 million in support of Ukrainian agriculture. That includes finding ways to provide lower interest rates for loans and moving equipment and inputs to areas in need.

(Farm Journal)

COMPASSION VERSUS COMPETITION

In five trips to Ukraine, Buffett says the experience of seeing the people, the land and the impact of war, has cast the situation in a different light.

“I know some farmers think they’re a competitor,” Buffett says. “That’s natural. If you want to think that way, that means your neighbor is also your competitor. Yet, we don’t treat our neighbor like they’re our competitor; we treat neighbors like neighbors.”

With a global lens, Buffett has witnessed how important Ukraine is to world stability. For him, it outweighs potentially lower prices when he hauls corn to the elevator in Decatur, Ill.

“It really isn’t a head-to-head competition,” he says. “Helping Ukraine is helping the world.”

Farm Journal Editor Clinton Griffiths is a TV newsman turned magazine editor with a passion for good stories. He believes the best life lessons can be found down a dirt road.

Danone Soars as Stronger Dairy Sales Accompany 900 Job Cuts

Fri, 23 Sep 2022 21:30:59 GMT

The giant yogurt maker foresees “negative” business conditions in Europe being more than offset by emerging markets.

Feb. 19 (Bloomberg) -- Danone, the owner of Evian bottled- water and Activia yogurt, rose the most in almost three years in Paris trading after fourth-quarter sales beat estimates and the company announced plans to cut 900 jobs in Europe.

The shares gained as much as 5.5 percent to 52.97 euros, the steepest intraday advance since May 2010. Like-for-like sales increased 4.9 percent in the fourth quarter, exceeding analyst estimates of a 3.7 percent gain.

The sales growth helped ease concern over weakening demand for dairy products in southern Europe as consumers shift to cheaper private-label alternatives. Danone, which gets more than half its sales from dairy products, said it will cut about 4 percent of jobs in Europe, or almost 1 percent of its total workforce, as part of a plan announced in December to reduce costs by 200 million euros ($267 million) over two years.

The stronger sales “might indicate that we may be close to a turning point,” Warren Ackerman, an analyst at Societe Generale, said in a note to clients. A 0.4 percent increase in the quantity of dairy products sold was the main reason that revenue beat estimates in the quarter, he said.

Danone stock traded 4.9 percent higher at 52.64 euros as of 3:26 p.m. in Paris trading. Nelson Peltz, the billionaire activist investor, said in November that his Trian Fund Management LP owned a 1 percent stake.

The jobs being eliminated comprise both management and administrative positions in 26 countries across Europe, the maker of Actimel yogurt drinks said. The plan is being presented to the company’s European Works Council today.

The cuts follow calls by Peltz for management to pare costs and focus on cash returns. The investor, who has helped bring change to companies including H.J. Heinz Co., Wendy’s Co. and Family Dollar Stores Inc., has also urged Danone to avoid costly takeovers. Danone Chief Executive Officer Franck Riboud declined to comment today on whether the two sides have met. A spokeswoman for Trian also declined to comment.

Danone studies all acquisition opportunities that arise, Chief Financial Officer Pierre-Andre Terisse said on a call with reporters today. He had no comment on Nestle SA’s plans to divest assets after its acquisition of an infant nutrition unit of Pfizer Inc. The French company said it would like to expand its collaboration with Yakult Honsha Co., though it has “no intention” of making a hostile bid to increase its 20 percent stake in the Japanese milk-drink maker.

‘Profitable Growth’

Danone forecast like-for-like sales growth of at least 5 percent this year, with “negative” business conditions in Europe being more than offset by emerging markets, which account for more than half of the company’s revenue.

The operating margin will probably narrow by 30 basis points to 50 basis points amid rising raw-materials prices and promotions on some products. Profitability is expected to improve in the second half of the year compared with the first six months and then stabilize in 2014, it said. The impact of raw-material costs is growing and they are expected to rise at a low-to-mid single-digit pace this year, according to Danone.

The 2013 guidance “should be enough to underpin the current consensuses and we expect little change to estimates,” Alex Smith, an analyst at Espirito Santo, wrote in a report.

Net income from continuing operations rose to 1.82 billion euros last year, from 1.75 billion euros a year earlier, the company said. The average estimate of 28 analysts surveyed by Bloomberg was 1.81 billion euros.

The operating margin narrowed 0.5 percentage point to 14.2 percent, while sales rose 5.4 percent on a like-for-like basis, exceeding 20 billion euros for the first time.

Like-for-like sales at the dairy products unit rose 1.3 percent in the fourth quarter, with higher prices adding to the volume growth, the company said.

Revenue from Danone’s bottled-water business increased 8.5 percent in the quarter, helped by increased demand in emerging markets. Sales of baby-nutrition products climbed 12 percent.

U.S. to Resume First Beef Imports from Ireland Since Mad Cow

Fri, 20 Nov 2020 05:41:52 GMT

Ireland says the United States will permit imports of beef from the country — the first European Union state allowed to resume sales since the mad cow disease scare over 15 years ago.

Simon Coveney, Ireland’s minister for agriculture, food and the marine, issued a statement Monday announcing that access to the lucrative U.S. market came after American authorities inspected Ireland’s beef production systems. Authorities estimate annual exports could be worth at least 25 million euros ($30 million).

The U.S. lifted its ban on beef from the EU in March 2014, but inspections were necessary before exports were allowed to resume.

Mad cow disease or bovine spongiform encephalopathy (BSE), is fatal to cows and can cause a fatal human brain disease in people who eat meat from infected cows.

Australia: Beef Exporters Eye Bigger Stake after US Scare

Fri, 20 Nov 2020 05:35:09 GMT

The discovery of mad cow disease in the US this week could be a boon for Australia’s beef export industry but it is too early to make predictions, industry leaders say.

Australian Beef Association executive officer David Byard said the flow-on effect from finding a US dairy cow with bovine spongiform encephalopathy, or mad cow disease, was not known yet and would depend on reactions in the heavyweight markets of South Korea and Japan.

Indonesia said yesterday it would halt American meat imports indefinitely and South Korea said it might strengthen meat quarantine inspections. But the Japanese animal health affairs office told the Bloomberg newsagency it would not suspend imports.

Outbreaks of mad cow disease in 2003 resulted in South Korea banning US beef imports until 2008.

Mr Byard said any suspension of US beef on international markets could benefit the $4.4 billion Australian beef export industry.

It would benefit us and we jolly well need it at this stage because our beef exports have dropped right back, he said.

Meat and Livestock Australia chief economist Tim McRae said any disease outbreak with food safety issues related to beef was a negative for the entire industry.

He refused to speculate on whether the finding would benefit the Australian beef industry but said MLA offices in Tokyo and Seoul were watching the situation closely.

It’s going to be a different situation than we saw in 2003 when the US got locked out of all its export markets, Mr McRae said, adding he expected the effects of the latest finding would be more subdued.

WA Pastoralists and Graziers Association livestock chairman Digby Stretch said a price rise for beef producers and exporters based on someone else’s hardship would be a hollow victory.

The mad cow disease finding is the fourth in the US since 2003 and came from random testing of a dead dairy cow in California. US authorities moved quickly to reassure global markets the cow had not been for human consumption.

US Cow Herd Decline Australia's gain

Fri, 20 Nov 2020 05:34:54 GMT

A BIGGER than expected drop in the US herd may offer a small reprieve for Australian beef exporters facing falls in Japan and Korea, analysis suggests.

The US industry is still reeling after a USDA report counted beef cattle numbers at their lowest in 60 years.

In its twice-yearly cattle report, the USDA pegged cattle and calves in the US as of January 1 at 90.8 million head, 2.1 per cent below the 92.7m a year ago and the lowest January 1 inventory of all cattle and calves since the 88.1m on hand in 1952.

Analysts, on average, were expecting the inventory decline by about 1.7pc.

Beefcow inventories, a major source of grinding beef for the American hamburger chains, declined by 3.1pc, 0.3pc more than what previous analysis was anticipating.

The USDA also reported the 2011 calf crop at 35.3m head, down 1pc from 2010 and the smallest calf crop since the 34.9m born during 1950.

Calves born during the first half of 2011 were estimated at 25.7m, down 1pc from 2010.

Even before figures from the January audit were released, the USDA was forecasting total beef and veal production for the US would decline 5pc on the previous year, to 11.322 million tonnes carcase weight.

To put this in context, the decline of 560,000 tonnes cwt is more than one-quarter of Australia’s annual beef production.

The plummeting cattle numbers in Australia’s second biggest exportmarket, accelerated by drought and forage shortages, translate into positive news for Australian beef producers and exporters, according to MLA chief economist Tim McRae.

“The first effect we’ll see is that there will be pressure on their cattle prices and as the US still sets the tone for prices elsewhere across the world, over the longer term we should see Australian prices follow suit,” he said.

“The most significant number for me is their decrease in cow numbers.

“This will affect their ability to produce lean, grinding beef, which Australia can fill the gap on quite nicely when the world demands it.

“They are also holding on to their heifer replacements so we should see their herd stabilise, but as their supplies tighten their production will be affected and their import demand should increase.

“These are all good signals for Australian producers.”

Even if the seasons improve this year, production declines in the US will continue for at least the next three years, according to the USDA report.

As its author notes, improved seasons could see heifer retention continue and accelerate, which will see US beef production decline further over the next few years as those females are removed from the supply of feeder cattle.

If, for example, producers begin retaining more heifers in 2012, those heifers will not be bred until 2013 and will not deliver their first calves until 2014.

Those calves will not reach finished weights and contribute to beef production until 2015.

The latest figures accord roughly with MLA’s outlook for Australian beefexport prospects to the US over coming months.

After a decade of declining shipments, Australian beef and veal exports to the US are forecast to increase in 2012, attracted by historically high prices for manufacturing beef and on the foundation of a very tight supply of beef in the US.

As Mr McRae noted in his recent Cattle Projections report released, Australian shipments are anticipated to increase 28pc on 2011, to 215,000 tonnes shipped weight.

This will make the US one of Australia’s fastest growing beefmarkets. While the forecast tonnage is still a historically low volume, it leaves plenty of scope for further increases in subsequent years, Mr McRae notes.

There are some major hurdles for Australian exports to the US in 2012, including the fragile state of the US economy and weakened consumer spending, the high A$ and increased E.coli testing requirements that have been sparked by recent food safety scares with locally grown product.

Based on several trends, if Australian exporters are to make inroads in the US this year - to improve on last year’s decline of 9pc, the lowest annual total since the late 1960s - then the revival will come through grinding beef and not primal cuts based on historical trends.

As Mr McRae notes in his report, the decline in shipments to the US over the past decade has been due to many factors, most notably the A$, but the fall in the past 12 months has been assisted by burgeoning demand for manufacturing beef in other markets.

Manufacturing beef shipments made up 62pc of Australian beefexports to the US in 2011, similar to the proportion in 2010.

The majority of other exports for the year were thin flank (12pc), topside/insides (8pc), shin/shank (5pc) and silverside/outsides (4pc). Frozen beef made up 83pc of total exports for the year.

Will China's Appetite for Cheese Boost Milk Prices?

Fri, 20 Nov 2020 03:01:28 GMT

Last month Chinese officials announced they were lowing import tariffs on certain types of cheese. That’s great news for the dairy markets and will likely lead to an increase in cheese exports. However, while it will help, China’s demand for cheese is not likely going to be enough to compensate for the massive supply of milk and dairy products in the U.S.

”So [these lower tariffs are] a great news story,” Blohm explains. “Right now, the reality is that we have a surplus of cheese. Cheese prices as of late have been lower and that’s what’s been pulling that milk price down into the low $15 area with some of the deferred contracts already seeing $14.”

That said, the market is flooded in milk and dairy products she says. While every bit of extra demand will help the fundamental situation, she doesn’t see an increasing appetite for cheese in China as a silver bullet.

“I don’t know how much of an increase it’s going to do because of course a lot of that goes with currency fluctuations as well,” she says. “And we have competition from Oceana. I would say though, that it’s going to hopefully see a small increase in the exports. The exports in general need all the help they can get.”

According to Blohm milk prices could bounce another 50 cents in the near term but then they will do some sideways trading into the first quarter of 2018 because of strong milk production.

China: The Queen of Dairy Trade

Fri, 20 Nov 2020 03:01:25 GMT

By Alan Levitt, U.S. Dairy Export Council

The way things are tracking this year, China’s share of growth will be even greater. While we would like to see all major markets consuming and importing more dairy, the health of the global dairy market relies on a strong China—which is why this year’s purchase patterns have been such a welcome development.

Vibrant Chinese demand has import volume of the major commodities on a record pace of nearly 3.3 billion pounds in 2017. The last time China came close to that volume was during the 2013/14 import bubble, when Chinese buyers overestimated their dairy needs and imports spiked.

This time around, the rise is more logical. For the decade prior to the bubble, Chinese milk powder, cheese, butterfat and whey imports were rising at a compound annual growth rate of about 12% per year. Then came the spike and subsequent popping of the bubble when imports soared by 778 million pounds one year only to plummet by 732 million pounds shortly thereafter.

Where is China now? Back at a more stable, long-term growth pace of about 12% per year. A number we feel is sustainable for at least the medium-term, given population growth, continued urbanization and the overall shift to higher protein diets as incomes improve and the middle class blossoms.

Questions also surround China’s domestic milk production capacity. Unofficial data suggests flat output as small and medium-sized farmers continue to leave the sector more quickly than large-scale operations expand. Milk production costs are high and profitability issues plague the industry.

In addition, while China’s evolving food regulations can sometimes create challenges for companies looking to ship there, two recent moves actually facilitate dairy trade. Last month, Chinese regulators granted a two-year grace period for new certification requirements for food imports.

Prior to that, the U.S. and Chinese governments signed a memorandum of understanding in June that unclogged a backlog of U.S. dairy suppliers shut out of the market due to separate Chinese certification regulations implemented in 2014. USDEC worked with the National Milk Producers Federation and both governments to resolve that issue.

The supply and demand factors at play have lifted 2017 dairy exports to China. Through the first eight months of this year, Chinese whole milk powder imports grew 11% compared to the same time frame in 2016: Skim milk powder was up 29%, cheese rose 23%, butterfat gained 19% and whey increased by 9%.

There are some indications September results might not be as strong as June through August, when Chinese dairy commodity purchases rose 34% compared to the same period in 2016.

But even a down month is unlikely to blunt China’s steady import growth, nor its lofty position as a bellwether for global dairy trade.

Canada PM Stands by Supply Management as U.S. Debates NAFTA

Fri, 20 Nov 2020 03:01:05 GMT

Canadian Prime Minister Justin Trudeau says he will continue to defend the supply management system that protects the Canadian dairy industry in talks about revamping the North American Free Trade Agreement.

A U.S. House subcommittee raised the long-standing trade irritant at its hearing on NAFTA negotiations Tuesday, suggesting Canadian measures to protect the industry will be a sticking point.

Congressman Ron Kind, a Democrat from Wisconsin, says he does not want to jeopardize a crucial trading relationship with Canada but thinks the system should be more balanced.

The Trump administration released its objectives for a new trade deal earlier this week, including better access for its agricultural exports.

Trudeau said Tuesday that Canada has signed significant trade deals with Europe, North America and elsewhere while protecting the supply management system.