World market holds a key to dairy’s success

Mary Hookham
For the Dairy Business Association
Marin Bozic

The major challenges of the past several years for dairy farmers have brought an intense focus on solutions. Where do we go from here?

Marin Bozic, an expert in dairy economics and an assistant professor in the University of Minnesota’s Department of Applied Economics, explored some of those solutions Jan. 23 at the Dairy Business Association’s annual Dairy Strong conference in Madison, Wis., where he spoke to hundreds of farmers and agribusiness professionals.

The issue of supply and demand has drawn much attention.

“Going forward, we know cows are improving their milk production at a faster rate than the rate at which our population is growing, and our components are growing as well,” Bozic said. “Some possible solutions to our supply and demand issues are to resolve the export issues immediately, do what we can to make Americans love dairy products more or reduce our cow numbers.”

The number of cows has declined by nearly 10 million animals since the end of World War II, but milk production continues to grow. Animals are producing more using less resources, and farmers, nutritionists and vets are collaborating more than ever before to increase efficiency. But America continues to struggle with maintaining a good market for all the milk produced.

“This isn’t a problem just for 2020,” Bozic said. “This is a problem for every year.”

Dairy trade in the United States has slowed during the past five years despite the fact that 10 billion pounds more milk are produced every year.

“The U.S. is well-positioned to be a major player in the world market,” he said, noting that the primary competitors for U.S. farmers are Europe and New Zealand.

Looking to the future of milk production, Bozic said the United State must resolve trade issues, and that starts with changing the relationship with China. The country acts as though it’s a market economy, but in reality, it’s a dictatorship, he said.

“The best way to defeat China as our biggest adversary is just to ignore them.”

The United States must also become energy independent and take advantage of technological advances. Our trading partners are aging, and women are coming up the ranks as leaders, Bozic said. This is something all farmers and agribusiness professionals must acknowledge.

Bozic points to the Dairy Margin Protection program to help ease the burdens on farmers. He warns not to over-think the program because it is designed to be easy to use.

These tools and forward-thinking ideas are valuable to Ripon dairy farmer Lori Badtke.

“Looking at the future of farming as opposed to just looking at what happened in the past is valuable for us as farmers,” Badtke said. “We will become more forward-thinking and more aware of the global economy, which is part of our planning process in the farm itself.”