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For years, consumers have been told to avoid full-fat dairy products. Guidelines from the USDA, the American Heart Association (AHA), the World Health Organization (WHO) and more have warned against consumption of saturated fats.
The June U.S. average milk price jumped while feed costs moved lower, resulting in the largest monthly Dairy Margin Coverage (DMC) program income margin since February. However, the weight of negative producer price differentials (PPDs) under the Federal Milk Marketing Order (FMMO) system – not included in risk management program calculations – along with high levels of depooling, left the announced milk price and DMC margin somewhat deceptive.
My colleague has likened the ride our dairy industry has been taking to an out-of-control car. One moment we are panicked by nearly plowing into the ditch from low prices, the next we are overcorrecting too hard on the wheel and veering into the ditch on the other side.
Even though COVID-19 has only been around for a few months, some consumer trends are already becoming apparent and important, says Larry Levin, executive vice president, market and shopper intelligence, with the data analytics and market research company IRI.
The dog days of summer are here, but that doesn’t mean you should let attention to dairy risk management stagnate. Failure to protect some currently strong margins or revenue could come back to bite you later.
U.S. milk production grew modestly in June 2020, as year-over-year milk production per cow was virtually unchanged. One trend to watch: Cow numbers declined for a third straight month.
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