School attendance will impact milk markets


School attendance will impact milk markets

A dairy economist estimates distant learning this school year could cause U.S. dairy prices to decline by five to 10 percent.

Nate Donnay with StoneX says about half of students are starting school at home which means school meals could decline by 30 to 50 percent.  Translating that lost dairy consumption into the price of milk, he estimates, “$1.60 per hundred is a decent impact.”

Donnay says recent milk production numbers are showing significant swings in the ability of farmers to control their output throughout the pandemic.

“What’s truly amazing here is how quickly dairy farmers slowed down milk production in April, May, and how fast they’ve ramped it up again in June and July.”

Milk per cow dropped by 61 pounds from May to June, then increased by 30 pounds in July which Donnay says suggests farmers can increase or decrease milk production much faster than previously thought.

He’s calling for one to two percent milk production growth in the next two quarters unless milk prices see another collapse.