Dairy producers facing
another year of low milk prices
By Jayme Lozano, AGN Media
Dairy producers had a successful year in 2018 due to the weather and production, but this year might prove to be a different story.
According to a dairy report from the National Milk Producers Federation, fallout from the tariff wars had a negative impact on the price outlook for U.S. dairy farmers and predicted an average all-milk price of $16.20 per hundredweight for 2019, one of the lowest prices in the last decade. The U.S. Department of Agriculture has since increased the forecast prediction to $17.25 per hundredweight, which still puts dairy farmers in a fifth year of low prices.
“We’re in a low time in milk prices, we had a low year,” said Darren Turley, executive director of the Texas Association of Dairymen. “We should see a little bit better pricing this year, but nothing really substantial so maybe we break even, but not by a lot. That’s what we’re expecting for most of the year.”
One reason for the lower prices is the over-abundance of milk nationally. Turley said that since Texas leads production, dairy producers may not feel the drop in prices as much as other states. It also helps that there are more places to store milk, thanks to expansion projects such as the Continental Dairy Facilities Southwest plant that will open this summer in Littlefield.
“Having the ability to have a home for the milk has been crucial,” Turley explained. “The plant in Canyon opened about a year and a half ago and that’s helped ease this down time, so we’ve just had more demand than most of the country who hasn’t been expanding as much as we are here.”
With 80 percent of the state’s milk coming from the Panhandle and talk of developing more projects to help with production in the future, the pressure due to dropping prices may ease.
“In the Panhandle, we’re still seeing great production and discussion of a few new dairies, nothing drastic but expansions and new operations that might come this year,” said Turley. “Labor is hard to find and the cost of labor keeps increasing so we also have our first robotics barn coming in the fall.” A new insurance program that was included in the 2018 Farm Bill called the Dairy Margin Coverage expands the coverage levels for farmers. Since the program was delayed by the government shutdown earlier this year, payments will be retroactive to January. The U.S. Farm Service Agency says the program is expected to be ready for enrollment in June.