While that could lead to higher prices for beef producers, Total Farm Marketing shares what it means for dairy farmers.
“In theory, if you look at the dairy industry and see that the shift over the last several years has been to more dairy-beef production, yes, that’s good for dairy producers. But does it take cows out of the production cycle to get that kind of reduced herd to push prices higher? That’s the million-dollar question. And so, you’re still dealing with an industry that continues to consolidate. You see smaller farmers moving more to the wayside. That’s just the nature of it right now,” said Bryan Doherty.
Bryan Doherty says two things need to happen to get milk prices higher.
“We need demand to cycle in in a bigger way than it has been or the market has to actually see or at least perceive that the cow numbers are taking an appreciable drop. I’m not talking 10 or 20,000 cows from report to report, I’m talking about an appreciable drop of one or two percent. That we haven’t seen on the cow side.”
This comes as dairy producers are facing significant headwinds including the Chinese economy and consumer debt in the U.S..