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box program, Kings County dairy farmer JoaquinContente saidhe feels “evenmore uncomfortable”aboutwheretheeconomic outlook for dairiesmay be headed. Contente said he would like to see all U.S. dairy processors and cooperatives impose supply management strategies, noting that some of them have had such programs in place since last year, to dis- courage dairy farmers from producing more than their base amount. Van Steyn said the increased price of feedmay affect milk output, with farmers needing to tightentheirbelts.Henoted the lack of rain this year has resulted in “ter- rible” yields on his silage crops, and that he would need to buy more on the mar- ket. Because of reduced water supplies and farmers fallowingmore fields, he said Californiaacreage for forage crops suchas alfalfa hay tends to drop, shortening sup- plies and raising the cost to feed livestock. Though it’s still early to know how the newU.S.corncropwill turnout,LaMendola saidrisinggrainpriceswillcertainlysqueeze dairy farmers’ margins. She said that will eventuallyslowmilkproduction,as farmers areeitherforcedbyprocessorstocutbackor need tobecausecostshave risen. Notingthatcullingratesranlight lastyear, she said it will be interesting to see if that is oneoptionfarmersusemorethisyear tore- duce their costs, particularly if higher cattle prices incentivizeculling. Higher feed prices could lead to some reduction in the nation’s cowherd, Karlin said, but improved cow genetics and ef- ficiencies on the farm have steadily in- creasedmilk production per cow, despite fluctuations in cownumbers. By selling more of their less produc- tive cows and replacing themwith high- er-quality animals, dairy farmers could in effect increase national milk output, Contentesaid. Evenso, hesaidhedoes feel “theworst isbehindus” fromthepandem- ic—thoughhe saidhe remains concerned about spikes in COVID-19 infections that could led states to lock down again. “Whether it’s through vaccinations or herd immunity, we’re going toget past this, andwe’llgetbacktosomesortofnormalcy,” he said. (ChingLeeisanassistanteditorofAgAlert. Shemaybe contactedat clee@cfbf.com.)
“The problem is that, traditionally, de- mandonlyincreasesby1%ayear,andwe’ve got twice asmuch (additional) milk as we haveanoutlet for,”saidJoelKarlin, amarket analyst forWesternMilling inGoshen. Though dairy product sales to food ser- vicehavepickedupandretail sales remain robust, Americans’ future buying habits are harder to pinpoint, LaMendola said, adding that she does not expect both food service and retail trends will hold. “Some people are really, really tired of cooking and they’re going to get back out andgobackouttoeat,”shesaid.“ButI’vealso heard some stories of people finding them- selves in their kitchen and have enjoyed learninghowtocook,andmaykeepthatup.” Pointingout thatmore thanhalf of dairy products suchasbutter, creamandcertain types of cheeses are consumed away from home, Karlin said the key to sustaining growth in demand is the return of dining establishments and people eating out more. Some retail sales will “tail off,” he said, but those losses will likely be offset by increased consumption at restaurants. “People’s income is up, their spending is upand,moreimportantly, theirconfidence is up,” he said. “They have a desire and ac- tually a fairly large stockpile of money that they’ve accumulated. I think that really bodeswell fordairydemandgoingforward.” Karlinsaidhealsothinksthedairycatego-
Sacramento County dairy farmer Case van Steyn checks on the progress of a milk truck collecting milk from his farm.
ry has gotten “a little bit of its halo back” in thepastyear, aspeoplehaveoptedformore nutrient-dense foods during thepandemic and “consumed a lot more dairy products than they had in the past”—a trendhe said he thinkswill continue, at least for awhile. Another bright spot is a resurgence in dairy exports as other countries emerge fromthepandemic,hesaid.Reducedtrade tensions withMexico and China, the na- tion’s largest dairy importers, have been
beneficial, he said. A lower-valued dollar and competitive prices also have helped. Evena1%increaseofmilkgoing to foreign markets “canhaveamajor impact onpric- es,” he added. Onepotentialnegativefordemandarose from the discontinuation of the Farmers to Families Food Box program, which launchedlastyearinresponsetomarketdis- ruptions caused by pandemic lockdowns. USDA announced last week it would end theprogramafterMay, infavorofsupporting more traditional food-aidprograms. The food box programhas been an im- portant outlet for dairy products, particu- larly cheese, LaMendola said, noting that governmentpurchasesunder theprogram helped send cheese prices to record-high levels last year aftermarkets crashed early in the pandemic. Unlike other food assistance programs such as food stamps, Sacramento County dairy farmer Case vanSteyn saidhe thinks the foodboxprogramismorebeneficial to dairies because USDA requires a certain amount of dairy products be included in every box. This also benefits the people receiving the aid, he said, because of the enhancednutritional value inthoseboxes. WithU.S.milkproductioncontinuing at itscurrentpaceandcancellationof thefood
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Two positions have become available on the state Nursery Advisory Board, which consults with the Cal i fornia Department of Food andAgriculture Pest Exclusion Branch. CDFA said it would accept applications throughMay 17 for twomidtermappoint- ments. The terms for the twoseatswill end Jan. 31, 2025. The board advises the CDFA Nursery ServicesProgramonpolicies, feesandoth- er issuesconcerningnurseriesandnursery stock. It also facilitatescommunicationbe-
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10 Ag Alert April 21, 2021
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