Dairy Markets Prove Resilient

Consumers Turning to Comfort Food Has Helped

By Tim Hammerich with the Ag Information Network

It’s been a volatile year for most agricultural commodities, but dairy might have experienced it most intensely. Prices started the year very strong, but were hit hard in the spring as the pandemic spread. Since that time though, they have recovered.

UC Davis Agricultural Economist Dr. Dan Sumner,  said cheese has led the way. “One of the issues is cheese markets have boomed and other markets haven’t. We’ve shifted from people consuming their cheese on a cheeseburger they grabbed at the fast food place to now consuming their cheese in their grilled cheese sandwich they eat at home. Or the macaroni and cheese as we went all back to comfort food in the spring,” explained Sumner.

“These kinds of volatilities are partly because of the shutdown and the milk market, even though there were some videos showing people dumping milk, that was not particularly common. It was terrible. It’s emotional for me and everybody else who cares about the milk market,” said Sumner.

“You hate to see milk poured out. But it was a headline because it was rare. And I do think that was a temporary thing; it got settled pretty quickly. And the dairy industry has really been remarkably resilient. And the marketing side of the industry just did a great job.”

Dr. Sumner applauded the dairy producers and marketers for their resilience during this difficult time as they’ve had to pivot from food service to accommodate consumers eating at home.

Hope Yet For California Dairy Industry

Proposed Federal Marketing Order Would Benefit California Dairy Farmers

By Brian German, Associate Editor

Chandler Goule, senior vice president of programs for the National Farmers Union
Chandler Goule, senior vice president of programs for the National Farmers Union

California gets hit the hardest when milk prices drop and it is the last state to recover from depressed dairy prices. The California dairy industry eagerly awaits a decision from the USDA regarding the move to a Federal Milk Marketing Order (FMMO). Chandler Goule, senior vice president of programs for the National Farmers Union, believes the state will gain from moving to FMMO.

“I think it will definitely be a win for the dairy industry,” said Goule, “and for our dairymen out there.” Goule anticipates increased participation in the margin revenue program that was incorporated into the FMMO.

Should the USDA hand down a positive determination, the move to a federal order would require a 2/3 majority vote from California dairy producers. “With California being so far from the corn and grain belt, even though you all produce a lot of food in California, it’s not necessarily feed additives for livestock,” Goule remarked.

Unfortunately, the FMMO has a much better chance of being voted in during a time when milk prices are low, according to Goule, as high milk prices may lessen voter turnout and sense of urgency.

“I’m definitely not advocating for low milk prices whatsoever,” Goule said. “We want high milk prices out there. The sooner we can get this vote done, the better off California will be, and the better off your milk prices will be. Then we can start working on this as a nation rather than 48 states—and California by itself.”