Voting has wrapped up on whether to approve the new Federal Milk Marketing Orders. Leonard Polzin is the dairy markets and policy outreach specialist at the University of Wisconsin.
“Ballots have to be received by USDA by January 15, so they had to be postmarked by December 31. So, all the voting has taken place, waiting to receive ballots, and then once those ballots are received, the tallying process takes place. Once that happens, there will be an announcement that comes out, and it’s important to note that there will be a period between the announcement and when implementation takes place. So, 30 days before implementing these changes, USDA will put out an announcement, so that way industry and folks can plan accordingly.”
He says the dairy markets are facing uncertainty early in the new year.
“I do think tariffs are worth looking at, but right now, it’s kind of a known-unknown of how much and who. Sometimes when tariffs are implemented, what we have seen in the past from time to time is when there isn’t ample supply in the world market of a certain product, we do see still a willingness to purchase at an elevated price. That doesn’t happen all the time, and it’s not every product, but we have seen that in different portions of the dairy complex. So, depending on what availability looks like and who our buyers are, some of the tariff effects may be lesser than what maybe we originally anticipated.”
There are also questions about processing capacity and demand.
“I think one thing with the processing capacity versus the tariffs is the processing capacity is a known-known, right? We already know there have been large investments across the entire U.S., across the entire dairy complex into processing. So, we know that that’s coming online, starting in February, with some large processing expansions coming. And then with that, we also already know that consumer demand in the dairy space, in aggregate – while certain products have been doing quite well and are holding out – we’ve been, I’d say, fairly flat. So, if we’ve been rowing the boat, if you will, what happens when all of a sudden, we get that much more processing capacity and that much more product into our market? How are we going to be able to absorb that?”