Dairy Demand Optimistic

Dairy Demand Optimistic

Tim Hammerich
Tim Hammerich
News Reporter
This is Tim Hammerich with your Market Line report for Thursday, January 2nd.

How are you as dairy farmers fairing in the midst of trade talks, Dean Foods' bankruptcy and competitive pressure from nondairy alternatives? Well, pretty well says HighGround Dairy Director of Market Intelligence, Lucas Fuess.

Fuess..."As farmers finally see better prices and the best profitability in years creep back into milk checks. In recent months, we are seeing those cow numbers start to tick higher, for the first time in two or three years. So a key driver into 2020 will be how soon and how a strong milk production can come back on. However, from the demand side of the picture, domestic demand is strong, food service demand remains strong. That should keep a cheese flowing into retail channels into 2020. And then globally, skim milk powder or what we call in the U S nonfat dry milk demand continues at very strong levels. We see lower stocks globally, both in the U S and into Europe, and that should keep things tight as well. So should be a good year profitability wise for dairy farmers and continue to see good demand."

Continued strong global demand for milk and cheese could also be a good early indication for stronger feed commodities demand as these dairies grow in numbers.

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