Coronavirus outbreak causing economic issues for the dairy industry
Milk production prices going to drop
WESTBY, Wis. (WKBT) – Local dairy farmers are taking another hit as milk production prices will soon drop from the coronavirus outbreak.
The U.S. is one of several countries that exports milk and other dairy products to China.
But the coronavirus outbreak is slowing down that process, as production prices for milk will take a tumble.
This is leaving farmers in a tougher spot that they have been.
“It’s certainly a day of everyday stress,” organic dairy farmer Darin Von Ruden said. “So, just not knowing what the future’s gonna bring.”
Things were looking better for Von Ruden towards the end of last year, as milk production prices continued to rise.
But the new coronavirus has not been kind to him and other farmers.
“It’s gonna be a real struggle because we’ve really only had a few months of positive income coming in the last three months here coming off of a six-year downturn in prices,” Von Ruden said.
The rapidly spreading virus is making it more difficult for China to import dairy products, and not just milk.
“We certainly do sell some cheese to China,” UW-Madison Director of Dairy Policy Analysis Mark Stephenson said. “We sell quite a bit to Southeast Asia. And if those markets are disrupted, that’s a concern. China is the world’s largest buyer of dairy products as an importer.”
As a result, local farmers will start seeing milk production prices fall.
“Going from that 19 to 20 (dollar range) to 17 (dollars) is probably where we’re going to be at,” Von Ruden said.
Stephenson says if China continues to shut down their imports, it might really hurt other countries.
“Then you have to worry about whether it’s the whole world that tailspins into a poor economy,” Stephenson said.
Not all hope is lost for Von Ruden.
“If we can rebound in a three to four-month period, back up to the current pay prices, that’ll certainly help farmers,” Von Ruden said.
But he realizes the near future revolves around a world of uncertainty.
“Two months of recovery is not enough to get through the hard times again,” Von Ruden said.
Von Ruden says milk prices in stores will most likely see a drop.
Twenty-three states in the country have major production in the dairy industry.
Wisconsin is the second-highest ranked state in dairy production.