In your February 10, 2019 issue

THE GOVERNMENT SHUTDOWN that began on December 22, 2018, has become the longest in U.S. history. Among the 380,000 furloughed employees are those in a number of USDA agencies. As a result, many agricultural reports have been frozen, including milk production data.

FUTURES CONTRACTS INDICATE steady improvement in Class III milk prices. February and March contracts hovered near the $14 range, while April to June climbed to a $15 average. July to December futures traded near $16.20 with an October high of $16.35.

DAIRY FARMERS NOW HAVE ACCESS to multiple risk protection programs including Dairy Margin Coverage, Dairy Revenue Protection, Livestock Gross Margin, and futures contracts. “Within one or two years, we could reach price protection levels in dairy that match those in crops at 30 to 50 percent for any given year,” said Marin Bozic.

A DAIRY SAFETY COCOON may shield a group of producers from market forces under the Dairy Margin Coverage program, added the University of Minnesota economist. Farmers producing under 5 million pounds of milk (roughly 220 cows) can insure milk at the $9.50 margin for premium levels lower than contributions made to the dairy checkoff.

UNDER REVAMPED DAIRY POLICY, farms from 250 cows to as many as 1,000 cows could be the most economically fragile, Bozic suggested.

WHAT DOES 2030 LOOK LIKE for U.S. dairy farmers? “The U.S. is moving from 105 to 113 percent self sufficiency (net exporter),” said Torsten Hemme of the German-based IFCN Dairy Research Center. “When that happens, U.S. milk prices may be closer to world milk prices.”

GLOBAL DEMAND FOR MILK could expand 2.3 percent annually from 2019 to 2030, added Hemme during IDFA’s Dairy Forum. “That is 23 million tons of new milk annually or adding one New Zealand each year.”

THE WORLD’S MAJOR EXPORTERS include New Zealand, the European Union, and the United States. “New Zealand produces 2.6 percent of the world’s milk, but accounts for 27 percent of the global dairy trade,” said Kimberly Crewther from Dairy Companies Association.

OVERALL, THE KIWIS EXPORT over 90 percent of their nation’s production with the EU at 47 percent and the United States at 13 percent.

TRADE CONTINUES TO BE RESHAPED. “By 2025, the prediction is that the European Union will have free trade agreements with every country in the world except for three — the U.S., Russia, and China.

BREXIT HAS THE POTENTIAL to be a larger market disrupter than the Russian dairy ban, suggested Alexander Anton with the European Dairy Association. That Russian dairy ban stifled both sales and prices.

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