The Year of the Cow

Author: Kristy

Record high milk prices, soaring dairy exports and moderating feed costs all point to some good economic times ahead.

MARCH 13, 2014

By: Jim Dickrell, Dairy Today Editor

The Chinese Zodiac proclaims 2014 as the “Year of the Horse.” But in today’s global market economy, 2014—and maybe 2015 and 2016—will be the year of the dairy cow, says Dan Basse, an agricultural economist and president of AgResources.

“This is your time. We have record high milk prices and dairy exports are now soaring,” he says. Couple that with much lower grain prices and moderating forage costs, and dairy farmers can celebrate some very good margins this year and into the next several.

Basse spoke at the Professional Dairy Producers of Wisconsin Business Conference here in Madison this week. Some 1,500 farmers and industry folks from 21 states attended the two-day event.

He believes income over feed cost margins will stay elevated over the next two to three years. There are a number of reasons why:

First off is world milk demand. “World fluid milk consumption continues to rise,” he says. And countries such as China and Mexico continue to import dairy products. He notes that China gross domestic product has gone from $2,000 in 2006 to $7,000 this year. That means Chinese consumers have more money to spend. And they’re spending on more and better foods such as dairy products. READ MORE

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