A breakdown of the milk market through the pandemic
The dairy industry was already struggling before the coronavirus created unprecedented challenges in agriculture. We have a breakdown of the milk market through the pandemic.
The dairy industry is seeing a decline after years of strong production.
Market analyst Sarina Sharp says that it was a global experience.
“For basically all of 2019, and a little bit of 2018, the big exporters outside of the United States, so that would be Europe, Argentina, and Brazil, New Zealand and Australia, collectively had a milk production deficit,” she said.
She notes that the 12-month decline is exceptionally rare and had a severe impact on prices. This set the industry up for a strong recovery, but then the pandemic hit. Production in April was still strong, forcing producers to scale back or dump milk.
Next, the laws of supply and demand kicked in. Lower supplies sent prices over $24 dollars per hundredweight last week, giving the market a very different outlook.
“I do think that we will have more milk than we need this fall,” Sharp said.
With global economies reopening, demand is returning and the newly implemented USMCA is expected to support purchase increases.