Ever.Ag Principal Mike North says one of the reasons the Class III milk price is hindered is due to unknowns regarding retaliatory tariffs, notably with Canada and Mexico.
“We aren’t going to know until next week, when the April 2 deadline hits as to what Mexico is going to do with us on that front,” North explains. “We’re already seeing pressure out of Canada. Anything that was covered under USMCA is still… doing okay. But Canada is more than willing and ready to throw tariffs on us on any and all ag products — that was their immediate response when these went live back in March.”
A necessity to raise milk prices is to shorten supply by growing exports or domestic demand exponentially to get ahead of a supply curve that’s projected to bring more product to the market, North says.
The latest National Agricultural Statistics Service Milk Production report shows February milk production was up 0.9 percent from last year, after adjusting for leap year. This is even as a majority of the top 24 milk-producing states saw year-over-year decline, including California (-7.1 percent), Illinois (-6.4 percent), and Washington (-6.2 percent).
Nationally, the dairy herd is also growing.
North emphasizes the need for producers to sign up for the Dairy Margin Coverage program. The deadline is March 31: https://www.fsa.usda.gov/resources/programs/dairy-margin-coverage-program-dmc
“There are no secrets about the benefits of this program. You have to have it in your arsenal,” he advises. “The way it’s built on a two-tier system… the first 5 million lbs per year on production is incredibly affordable, and you want to get that bought on a $9.50 margin coverage level. Get it bought, and get it bought right now.”
