CoBank: Demand shift to continue in dairy sector

Demand shift for the food supply chain has certainly shifted over the last few months and Cobank says that this will likely continue for the next year to year and a half.

They say that challenges for the dairy sector will be adapting to shifting demand amid unbalanced reopening of state’s economies. With consumers staying home, processed cheese, milk, and cereal sales all jumped by 10-20 percent. Their report also shows that up to one quarter of the country’s restraints could face closing their doors.

Price volatility resulting from COVID-19 and rule changes in the 2018 Farm Bill could mean negative or low returns from milk marketing revenue sharing pools. American Farm Bureau says that the negative producer price differentials are expected to offset price increases seen recently, by as much as $5-7 dollars per hundredweight.