Dairy Industry Looking Ahead To 2018

2018 promises to be a big year for the dairy industry.  An important part of the conversation will be managing volatility and how to improve current price support programs.  Like all of agriculture, the dairy industry is eagerly awaiting the launch of a new Farm Bill.

Policies to improve the current economic climate for the nation’s milk producers are currently being discussed, including ways to navigate market swings.  Industry expert Bob Cropp of the University of Wisconsin-Madison said fluctuating cheese production and export markets have been a major cause of market volatility in recent years.

“We’ve had $24 milk in 2014 and we got down to the 17s and the volatility is very difficult to plan especially if you’re making a major capital investment.  You just made it, you know, and you get hit by those low prices, it’s tough.”

So what is a dairy to do to weather those ups and downs? Cropp has a few tips.

“There are risk management tools, there’s dairy futures there options that they can use to put a little more certainty in that milk price.  You really got to look at some of those tools, and a lot of milk plants will allow you to forward price your milk.  So, I think you need to consider if the milk price looks good down the road they aught to take advantage and lock some of that in.”

U.S. dairymen are looking to the 2018 Farm Bill to stabilize prices and continue providing dependable milk markets.  Cropp said that the USDA’s existing MPP could be on the chopping block.

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