IARN — A dairy economist believes the industry will face a tough road at the start of 2021.
Marin Bozic is an assistant professor in dairy foods marketing economics in the department of applied economics at the University of Minnesota. In a recent conference call with reporters, Bozic said the first few months of the new year will present challenges to dairy farmers. The COVID-19 pandemic takes most of the responsibility.
“Good news and bad news on the COVID-19 front,” Bozic said. “The good news is three viable vaccines that are pending emergency use authorization in the next 10 days. They will start rolling out to the general population. By next summer, we should be back to normal. The bad news is the next few weeks, and perhaps next few months, are going to be literally deadly. With high infection rates and high hospitalization rates, what that means for dairy markets is we will have less demand for dairy products on anything that has to do with food away from home.”
According to the Iowa State Dairy Association, there are approximately 1,360 licensed dairy herds in the state. Iowa is the 12th largest milk-producing state in the US. Additionally, Iowa dairy farms generate approximately $837 million in milk sales annually.
Bozic adds butter and cheese producers had respectable growth year/year in 2020, however, there is uncertainty for next year.
“A lot of that growth was due to the intervention programs that were appropriated in 2020, but there is no industry consensus about their beneficial impact to the dairy industry in 2021,” Bozic said. “The incoming administration has also not signaled their willingness yet to continue the Farmers to Families Food Box Program.”
Bozic noted that national milk production grew tremendously in 2020 with 2.3 percent growth rates in September and October.
Story courtesy of the Iowa Agribusiness Radio Network.
