A dairy economist says he’s concerned about the impact
ad-hock payments to dairy farmers could lead to more milk production.
Marin Bozic with the University of Minnesota tells
Brownfield the Coronavirus Food Assistance Program direct payments are helpful
to a farmer’s bottom line in the short-term but are likely to also lead to
dairy farm investments.
“Maybe they will introduce robots, maybe they will add a few
hundred cows. Those decisions make a lot
of sense on every individual farm, collectively however they, more often than
not, result in oversupply.”
Bozic says at the same time, the Michigan cheese plant, a
joint venture between Glanbia, Dairy Farmers of America, and Select Milk
Producers will be opening with its own timeline of expanded production.
“They will be ramping up over a six-month period, so heading
into spring flush 2021, we will have eight million pounds of milk more being
converted to cheddar cheese.”
And in Minnesota, First District Association will be
completing an expansion that will increase processing up to two million pounds
per day for cheese production to which Bozic says…
“We will not suddenly as a nation be consuming that much
more cheddar cheese per capita just because there’s a new plant out there.”
He expects a narrowing of the block barrel spread and a hit
on Class III prices during the first half of 2021 as a result.
--Brownfield AgNews