Oversupplied dairy markets in the US have put pressure on milk prices and led to significant consolidation on dairy farms, members of Holstein NI were told on Monday evening.
Speaking at an event in Lisburn, Brian Behnke from Wisconsin said that milk prices in USA are under $15 per100lb at present, with cost of production on most dairy farms typically running at $18-20 per 100lb.
“There have been 600 herds that have sold out in Wisconsin this year so far, but we have lost no cows. The herds leave but the cows don’t,” he said.
Behnke said that farms are getting bigger to spread capital and overhead costs over more cows and the oversupply issue could remain for at least another three years as there are 10m replacement dairy heifers in the US at present, compared to 9.2m cows.
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Guest speaker Brian Behnke from Wisconsin (second from right) with Wilbert Rankin, Holstein NI club president; Ervin McKinstry, Genus ABS; and Jason Booth, club chair. \ Julie Hazelton
World dairy markets have been insulated from the oversupply issue in the US due to the strength of the dollar having a negative effect on US dairy exports.
Behnke acknowledged that weakening of the dollar could lift exports and help the oversupply issue in the USA in the short-term, but he maintained the only way to properly address the issue was to reduce production.
“Our production is 3.6% higher than what our need is, so we need to cut the number of dairy cows in the US from 9.2m to 8.5m,” he said.
Behnke said that improved fertility and use of sexed semen were the main reasons behind the large number of replacement dairy heifers coming forward.
Use of beef semen is becoming more common, with the bottom 50% of dairy cows typically served with beef bulls.
Behnke warned that this will impact beef prices as more calves from the dairy herd enter feedlots.
He maintained that a government-funded culling programme was needed in the dairy industry to address the issue.
Trump
Under a reprieve in the trade war between USA and China announced earlier this month, President Donald Trump said that China will drop tariffs and purchase more agricultural goods from the US.
However, Behnke maintained that it is unlikely that this will result in a significant increase in dairy exports. Instead, he said that China is likely to buy more soya bean, which will increase feed prices for dairy farmers.
“I think he [Trump] has a plan, but it is a lot longer range plan than we can handle right now,” Behnke said.
Read more in this week’s NI edition of the Irish Farmers Journal and at www.ifj.ie/ni
Oversupplied dairy markets in the US have put pressure on milk prices and led to significant consolidation on dairy farms, members of Holstein NI were told on Monday evening.
Speaking at an event in Lisburn, Brian Behnke from Wisconsin said that milk prices in USA are under $15 per100lb at present, with cost of production on most dairy farms typically running at $18-20 per 100lb.
“There have been 600 herds that have sold out in Wisconsin this year so far, but we have lost no cows. The herds leave but the cows don’t,” he said.
Behnke said that farms are getting bigger to spread capital and overhead costs over more cows and the oversupply issue could remain for at least another three years as there are 10m replacement dairy heifers in the US at present, compared to 9.2m cows.
Listen to "Judging at RUAS Winter Fair" on Spreaker.
Guest speaker Brian Behnke from Wisconsin (second from right) with Wilbert Rankin, Holstein NI club president; Ervin McKinstry, Genus ABS; and Jason Booth, club chair. \ Julie Hazelton
World dairy markets have been insulated from the oversupply issue in the US due to the strength of the dollar having a negative effect on US dairy exports.
Behnke acknowledged that weakening of the dollar could lift exports and help the oversupply issue in the USA in the short-term, but he maintained the only way to properly address the issue was to reduce production.
“Our production is 3.6% higher than what our need is, so we need to cut the number of dairy cows in the US from 9.2m to 8.5m,” he said.
Behnke said that improved fertility and use of sexed semen were the main reasons behind the large number of replacement dairy heifers coming forward.
Use of beef semen is becoming more common, with the bottom 50% of dairy cows typically served with beef bulls.
Behnke warned that this will impact beef prices as more calves from the dairy herd enter feedlots.
He maintained that a government-funded culling programme was needed in the dairy industry to address the issue.
Trump
Under a reprieve in the trade war between USA and China announced earlier this month, President Donald Trump said that China will drop tariffs and purchase more agricultural goods from the US.
However, Behnke maintained that it is unlikely that this will result in a significant increase in dairy exports. Instead, he said that China is likely to buy more soya bean, which will increase feed prices for dairy farmers.
“I think he [Trump] has a plan, but it is a lot longer range plan than we can handle right now,” Behnke said.
Read more in this week’s NI edition of the Irish Farmers Journal and at www.ifj.ie/ni
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