Is the COVID-19 pandemic in our rearview mirror?
University of Wisconsin-Madison’s Mark Stephenson said he would not take the question mark off that statement just yet.
Stephenson spoke about the virus and its impact on dairy during a University of Wisconsin-Madison Division of Extension “Looking ahead for dairy” webinar.
He listed some reasons why those in the dairy business are filled with some optimism, including restaurants reopening, people returning to work, and some version of “normal” resuming. Export opportunities may expand, and dairy product buyers are sensing the bottom of the market has passed.
These positive attributes led to recent recovery in milk price futures, Stephenson shared, but then he posed the question, “Is this optimism real?”
He said that he has concerns about the economy, both U.S. and globally. “We are going to be in a pretty serious recession as we come out of this,” he said.
And even though good progress has been made toward vaccination creation, testing, and contact tracing, he noted that there could be another round of COVID-19 this fall, or mutations to the virus that could make it difficult to find an effective vaccine.
These unexpected hurdles put a dark cloud over a year that should have been filled with optimism for dairy. “This was supposed to be a year of recovery, but now it is looking like it will be the sixth year in a row of low milk prices,” Stephenson said.
He encouraged all farmers to keep lines of communication open with their banker. He also said some farms should ask themselves if they want to keep borrowing or if they should move toward a graceful exit from the dairy business. Stephenson anticipates a continued decline in the number of dairy cows in the U.S.