We touched on dairy only briefly last week during our discussion about the hardships agriculture is facing during this COVID-19 pandemic. Along with ethanol, dairy has really been taking it on the chin these past few days and weeks. 2020 was supposed to be the year things started turning around for the industry after years of struggles. So, what is going on?
When it comes to this most-recent downturn for the dairy industry, National Milk Producers Federation (NMPF) Senior Vice President of Communications Alan Bjerga says many things are weighing it down. However, there is a glimmer of hope in the way of financial assistance. The United States Department of Agriculture may be looking at making purchases of dairy products. This could be a win-win for farmers and people in need.
Milk futures are currently below $14. This is more due to the lack of food service demand, and not retail demand. Retail demand has been strong during this pandemic. This shows just how much weight restaurants and other institutions carry with the dairy market.
Demand is the most major piece of this puzzle. Unfortunately, we are in a moment in time where the future of that demand is highly uncertain.
The very nature of a pandemic is that its effects are being felt all around the globe. This isn?t just the markets of one or two countries being affected, this is causing uncertainty in the global marketplace. Because of this uncertainty, we don?t know when demand will return to normal.
Like with many of our agriculture industries, the government and commodity groups are doing what they can to help their producers through an uncertain time.
