Dairy Has Never Looked So Good
“There’s reasons to finally be upbeat in dairy.”
That was Dan Basse, president of the Chicago-based AgResource Company, at the recent Agricultural Bankers Conference.
And with 2021 dairy exports tracking toward setting a new record, dairy definitely has a reason to be “upbeat.”
Far East Eatery: So who’s driving the exorbitant export demand? China. The nation with the world’s largest population has had a healthy appetite for dairy products… a menu even the Chinese government is pushing.
Soundbite: Will Loux, director of global trade analysis at the U.S. Dairy Export Council had this to say: “A lot of [this demand] has to do with the Chinese government telling consumers, ‘Hey, dairy is really nutritious, it’s a great thing for your immunity, go out and buy dairy products.’”
And “buy dairy” they did. Amidst the pandemic, the Chinese government touting the health benefits of dairy resulted in a 32% increase in exports of dairy products to China during the first half of the year. So thank you, COVID. No really, thank you.
The best is yet to come: If 2021 was good, 2022 is projected to be even better. Exports across the barnyard are expected to be higher next year, but dairy exports specifically are projected to be $7.7B—that’s a forecasted increase of $200M.
On top of that, the USDA is projecting 2022 milk prices (across all classes) to pass the $20/hundredweight mark. Cha-ching.
Oh, and this: With international dairy demand climbing and proposed ag policy shifts likely transforming the European Union into a net dairy-importer in years to come, the longer-term future for dairy is looking up.