Cattle Inventory's Impact on Dairy

With your Southeast Regional Ag News, I am Haylie Shipp. This is the Ag Information Network.

Lower cattle numbers that lead to higher prices for beef producers also have implications for dairy farms. USDA recently reported the U.S. cattle herd reached its lowest level since 1951. Bryan Doherty of Total Farm Marketing explains what this 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.”

To get milk prices to head higher, Doherty says one of two things need to happen…

“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.”

Doherty says dairy producers are facing significant headwinds…

“The dollar, China economy, consumer debt here at home, less than 40 percent of Americans have $1,000 on hand or in the bank. Things are kind of tight. There's just not a lot of extra money to chase a lot of high price food value. Food inflation is still here, unfortunately.”

That’s Bryan Doherty of Total Farm Marketing.