Dairy industry added 60,000 new jobs in past two years

MIELKE, from pg. 16 gain was driven by higher domestic consumption, up 11.6 percent. Exports however were down 53.1 percent — the lowest volume since November 2020.

Berning blamed high U.S. butter prices at the end of 2022 for the drop in exports. She also pointed to higher output of American cheese — particularly cheddar — for putting the produce mix “off kilter,” adding to inventory, without the export demand for it.

Nonfat and skim milk powder demand, at 238.1 million pounds, was up 3.6 percent. Domestic usage was up 34.1 percent while exports were down 9.2 percent from a year ago. HighGround Dairy says domestic consumption was the highest since September 2020.

Admittedly, fluid milk sales continue to struggle; but overall demand for dairy continues to grow in the United States — contrary to what plant-based producers would like consumers to believe. The International Dairy Foods Association reports that, in September 2022, the USDA reported U.S. per capita dairy consumption jumped 12.4 pounds per person in 2021, continuing a 50-year growth trend that started in 1975 when USDA began tracking annual consumption.

Domestic consumption and exports also generated significant growth in the dairy industry, according to the IDFA, adding nearly 60,000 new jobs in the past two years, increasing average wages by 11 percent, and increasing its total impact on the U.S. economy by $41 billion, according to IDFA’s latest economic impact report.

IDFA’s 2023 Economic Impact Study showed the U.S. dairy industry’s economic impact totaled $793.75 billion. The report, released at the beginning of National Dairy Month, is conducted every two years.

Newly released figures indicate the U.S. dairy industry supports 3.2 million total jobs, including 1.078 million in dairy product manufacturing, up from 1.018 million in 2021, plus $49 billion in direct wages for workers, up from $42 billion in 2021. The report shows $72 billion in federal, state and local taxes (not including sales taxes paid by consumers), up from $67.1 million in 2021, 3 percent of U.S. GDP.

“The dairy industry is growing to keep pace with intense global demand, and that means more jobs, higher wages, more tax benefits, and more economic growth for communities across the U.S.,” said Michael Dykes, IDFA president and CEO.

Unfortunately, that good news hasn’t been so good for farmers. The June 12 Daily Dairy Report points out dairies “continue to struggle as margins remain tight. In 2021, 6 percent — or 1,794 farms — called it quits; and last year, another 7 percent or 1,910 operations sold out, leaving just 27,932 farms to meet growing demand, according to USDA.”

Dairy futures offer little hope for a turnaround any time soon.

Chicago Mercantile Exchange block cheddar fell to a $1.375 per pound June 16 finish. This is the lowest CME price since May 8, 2020, down 4.75 cents on the week and 77 cents below a year ago. With the exception of a half-cent increase the week of May 15, the blocks dropped 11 weeks in a row, losing 72.5 cents in that timeframe.

The barrels closed at $1.525, 4.5 cents lower, 63.25 cents below a year ago, and 15 cents above the blocks. Thirty cars of block sold on the week and three of barrel.

Midwest weather is prolonging the flush and milk is being dumped — though Dairy Market News reports some cheese plants say spot milk offers were not as numerous this week. There are continued expectations that milk availability will slacken as late spring weather begins; but spot prices got as low as $12 under Class this week, compared to $5 to $1 under a year ago.

Cheese processing is busy. Cheese demand is active, according to a number of upper Midwestern processors, and “customers are clearly less hesitant to purchase for near-to mid-term

Please complete the form below. Sign and date, include your check and put it in the mail. I own or operate 80+ acres of Minnesota and/or Northern Iowa ag cropland, raise 25+ head of livestock or am actively involved in agribusiness. Full