The U.S. dairy industry is seeing major growth outside of production drops in California, but supply may grow to outpace demand.
Despite that concern, one expert says that there are still opportunities for higher milk prices in the near future.
According to Mike North, “The reality of bringing back higher prices is going to mean two things. Number one, we’re going to have to shorten up supply, and we’re continuing to ramp up more and more production, and we have the cows to do it. So, as we talk about cheese production, the amount of new facilities that are coming online right now is such that, by the end of the year, we’re going to have 360 million pounds of cheese that do not have a home. So, we have to grow exports or domestic demand exponentially greater to get ahead of that supply curve and elevate prices to higher levels.”
North says that another big challenge, which could potentially slow down milk price growth, is tariffs.
“What will Mexico do? How will they respond? We’re already seeing pressure out of Canada. Anything that was covered under USMCA is still flying through and doing okay, but Canada’s ready and willing to throw more tariffs at us on any and all ag products. That was their immediate response when these went live back in March,” he notes.
According to the National Milk Producers Federation, esports help fill the gaps in domestic dairy consumption, growth, and promotion.
In fact, one out of every six gallons of milk produced by a U.S. dairy farmer is turned into dairy products and shipped overseas.
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