Welcome to the Bullvine Weekly Roundup, your
go -to podcast for the latest and most critical
news in the dairy and livestock industry. And
today, we're diving into the top stories that
have shaped the week. From shocking events in
Lancaster County to global market shifts, we've
got you covered. Let's get started. Our first
story takes us to Lancaster County, Pennsylvania,
where a series of senseless livestock shootings
has left farmers devastated. The attacks have
sparked an outpouring of community support and
raised urgent questions about rural security.
OK, so, you know, when you picture like Lancaster
County, Pennsylvania, you probably imagine, you
know. peaceful farms and those horse -drawn buggies
right yeah like a slower pace of life right exactly
like this pocket of tradition but recently a
really unsettling story has been coming out of
this community right like imagine waking up you
know on a normal morning Yeah. Not to the, you
know, sounds of a farmyard, but to like this
shocking discovery of devastation. Wow. Like
valuable livestock just senselessly gunned down.
Oh my God. In like a pre -dawn attack. Yeah.
It's the kind of news that makes you just stop
and think. you know no matter where you live
absolutely this is not just some local crime
story right it really sends ripples way beyond
lancaster county because it touches on how we
live yeah you know like where our food comes
from the people who produce it their hard work
and livelihoods right and that sense of security
we all kind of count on right in our communities
whether they're rural or urban so in this deep
dive we're going to unpack what happened with
these livestock shootings we want to go beyond
just the headlines you know and really try to
understand like the impact and why this story
should matter to you yeah it should and to do
that we've been looking at you know the story
as it's unfolded out of Lancaster County right
and what's really striking is how much this has
disrupted a community known for being tight -knit
yeah like everyone supports each other that's
really been shattered yeah what's really fascinating
and concerning right away is this suggestion
of coordination in these attacks Right. It wasn't
just a single isolated act. Multiple dairy farms
were targeted. Yeah. In those early morning hours.
On Saturday, March 15th. Yeah, like pre -dawn.
Right. It implies that there was a deliberate
effort to cause widespread damage. Right. And
to really instill fear within the farming community.
The details, you know, that are emerging talk
about Collarine Township. Yes. Specifically around
like Schoolhouse Road near Georgetown Road, where
two dairy cows were found dead around 11 a .m.
Wow. And it was the owner who had to make that
discovery. Oh, my gosh. And it's important to
remember, these weren't just anonymous cows,
right? Right. These were productive dairy animals.
Yeah. It represents a huge financial investment
in years of careful breeding. Precisely. The
economic impact here is really crucial to understand.
Right. Each of these cows isn't just an animal.
It's a vital part of a business, a source of
income. Yeah. You know, representing long -term
planning and dedicated care. Right. The financial
loss goes way beyond just the cost of the animal.
What's truly concerning is that cascading effect.
It's beyond the immediate loss of milk production.
It impacts breeding lines, future herd growth,
and even the farmer's ability to secure loans.
This isn't just about replacing an animal. It's
about rebuilding a core component of their business.
And the attacks weren't limited to a cholerane
township. The same perpetrators apparently moved
on to Sadsbury Township along South Vintage Road,
and they targeted more animals there. A horse
was shot. Thankfully, it survived. But another
cow died from its injuries. The fact that multiple
locations were targeted and different types of
livestock really suggests a level of planning
and intent that's concerning. The authorities
investigating these incidents were examining
evidence at multiple sites in the southeastern
part of the county. So the full scope of this
crime spree might be even wider than we initially
understood. But amidst all this really disheartening
news, it's been inspiring to see how the community
has rallied. It's that classic, you know... neighbors
helping neighbors thing it's so vital in agricultural
communities yeah it plays out in real time right
this is where you see that lend a hand spirit
yeah that's so essential to the strength of rural
communities right it kicks into action and almost
immediately a fundraiser was set up online right
to help these farm families deal with the unexpected
veterinary bills yeah and to begin that long
process of replacing the cows they've lost. And
it really brings home the point that we were
making about... These animals being so much more
than just livestock. Right. They're integral
to the farm's entire operation and the family's
livelihood. Replacing them is a huge undertaking.
Right. Not just in terms of cost, but also the
lost potential for future production. What's
been interesting is just how quickly that support
network kicked in. Right. It says a lot about
the deep interconnectedness within the agricultural
community. Yeah. You know what they say? The
person you help out today might be the one you
need to rely on tomorrow. There's a profound
understanding of shared vulnerability and the
absolute necessity of mutual support in this
way of life. But this incident also really shows
some of the unique security challenges that rural
farms often face. Like so often these operations
are located in pretty isolated areas with maybe
minimal natural surveillance. And potentially
less of a law enforcement presence. Right. Compared
to more densely populated urban centers. That
very isolation, while often. part of the appeal
and character of rural living, does create a
distinct set of security vulnerabilities, it
can inadvertently make these farms easier targets
for people with criminal intentions. Right. The
fact that these people could move between multiple
farm locations in the predawn hours undetected
raises serious questions about the security measures
in these areas. And it's prompting a lot of important
questions for dairy producers, not just in Lancaster
County, but all over the country. Yeah, for sure.
Like how visible are your barns and pastures
from public roads? Is there enough lighting?
Yeah. Have you considered security cameras, especially
at entry points? Right. What's your emergency
response plan? Do your insurance policies cover
livestock losses from criminal acts? Those are
all incredibly critical questions to think about.
A security specialist actually said something
really important. Okay. Dairy operations often
invest so much in their herds, but might overlook
basic security measures that could cost a fraction
of the loss of even one animal. Right. Simple
things like lighting. Yeah. Managing who has
access. Even inexpensive game cameras can make
a difference. Sobering thought, isn't it? It
is. Like no one wants to turn their farm into
a fortress, but this really shows the need to
address these vulnerabilities. You know, that
peaceful rural lifestyle we cherish does come
with risks that we maybe haven't fully appreciated
until now. It's true. And there are some really
practical, immediate action steps that are being
encouraged for dairy producers. Right. And anyone
who cares about our food supply first is to support
those affected in Lancaster County by contributing
to that online fundraiser. Right. Any amount
can help these families recover. Absolutely.
The second crucial step. Yeah. And this is something
anyone can consider. Right. Every farm to look
at their security. Yeah. You know, reviewing
and enhancing security measures around livestock
areas. And the motion activated lights, trail
cameras, or even more comprehensive security
systems. Has become more critical than ever.
Right. Thirdly, vigilance within the community
is key. Yeah. Reporting any suspicious vehicles
or individuals to the authorities immediately.
Right. Could prevent future incidents or help
the investigation. The call is also going out
to share information. Yes. You know, if you hear
about similar incidents, make sure those are
reported and that information is shared within
farming networks. So we can create a broader
awareness and maybe identify patterns that might
otherwise go unnoticed. Finally, and this is
especially important for anyone listening, who
might know anything about these shootings in
Lancaster County? Right. You're urged to contact
the Pennsylvania State Police in Lancaster. Yeah.
Even small pieces of information could be really
valuable to the investigation. Beyond these immediate
actions, this event brings up a bigger, more
systemic question. Yeah. How are crimes that.
target agricultural operations viewed and prosecuted
compared to other types of property crime. This
is a really important point to consider. These
weren't just random acts of vandalism. They were
calculated attacks on agricultural livelihoods.
And there's a concern that these types of crimes
in rural areas may not get the same attention
from law enforcement. or carry the same penalties
as similar crimes in urban settings. And the
information even suggests that there have been
similar livestock shootings in neighboring counties
in recent years with what many felt were insufficient
consequences. This potential disparity in how
society values and protects farming operations
is a serious concern. It is a concern for the
future. What's both fascinating and troubling
is this being described as agricultural terrorism
right while that term itself is loaded yeah it
shows that these acts don't just impact individual
farmers right they threaten our whole food production
system yeah If people can target livestock with
a low risk of consequences, then every farm is
more vulnerable. So as the investigation continues
in Lancaster County, it's clear that this story
has implications beyond that community. It does,
for sure. It reminds us of the vulnerabilities
in rural areas, the importance of community support,
and the need for a conversation about how we
value and protect those who produce our food.
So as we wrap up this deep dive, let's go over
some key takeaways. Okay. On Saturday, March
15th, multiple dairy farms in Lancaster County,
specifically in Coleraine and Sadsbury townships,
were targeted in coordinated livestock shootings.
Right. This resulted in the loss of valuable
cows and a horse. And beyond the purchase price.
Yeah. These farmers face huge financial losses.
Potentially up to $92 ,000 per cow. Wow. When
you consider their lifetime milk production potential.
But in this tough situation, the community has
shown incredible resilience. They have. By organizing
support through that Give Sen Go fundraiser.
Which really shows the solidarity in the agricultural
community. Right. However, the incident also
highlights the security vulnerabilities that
many rural farms face. Right. Due to their isolation
and sometimes limited law enforcement. Yeah.
This really emphasizes the importance of proactive
security measures. Like improved lighting and
surveillance. Exactly. And it's a call to action
for anyone in agriculture to be vigilant. Yeah.
Report suspicious activity. Share information
about similar incidents. And if you know anything
about the Lancaster County shootings. You need
to contact the authorities. Finally, this incident
raises a really important question. Do crimes
targeting agricultural operations get the same
attention and consequences as other property
crimes? Despite their potential impact on our
food system. And the livelihoods of those who
sustain it. Exactly. As Lancaster County farmers
rally together, another tragedy reminds us of
the importance of safety on the farm. Let's turn
to Ohio, where a heartbreaking loss is teaching
valuable lessons. Reid Hostetler's untimely death
due to preventable equipment failure has sent
shockwaves through the dairy community. His story
underscores the need for stricter safety protocols
and better awareness on farms worldwide. We've
been talking a lot about how tight -knit the
dairy farming world is and about relying on safety
and how strong the community is. And that kind
of brings us to this really sad event that happened
with Reid Hostetler. Yeah, it was a really sad
day for the farming community in Marshallville,
Ohio, back on March 5th, 2025. Wow. When Reed
passed away and he was only 31. So young. And,
you know, this deep dive that we're going to
have today is, you know, it's more than just
recounting the events that happened. It's about
understanding, you know, all the different pieces
of this. you know, remembering Reed and what
he did and kind of extracting some fundamental
truths about, you know, farm safety and how these
communities, you know, really step up and support
one another. Absolutely. And I think, you know,
like you were saying, it's so important to, you
know, we're going to delve into what made Reed
such a vital part of this community, how they
all came together when this awful thing happened.
And I think most importantly, we're going to
examine what this means for safety on farms like
this and specifically thinking about manure storage.
Exactly. So why don't we start by getting a clearer
picture of Reed himself? Yeah, I think the thing
that really strikes you is that Reed was more
than just, you know, a guy that milked cows.
He was a co -owner of Eleanor Dairy Farm. Okay.
And so he was really invested in every aspect
of the operation. Wow. And, you know, people
who knew him talked about how good he was mechanically.
Like if something had an engine or gears, Reed
could fix it. Oh, wow. Which on a modern farm,
that's super valuable. Yeah, that's a huge asset.
Yeah. And then on top of that, he also had really
good business sense. Oh, wow. Which is something
you really need in today's dairy industry. Absolutely.
So, you know. I mean, it really, you know, like
you said, it challenges that simple image of
just a farmer. Right. I mean, clearly he was
wearing a lot of hats and, you know, he was working
the land, but it sounds like he had all these
other experiences too. Yeah. You know, he hiked
a big part of the Appalachian Trail. That's right.
Which, you know, to do that, you have to be pretty
tough and tenacious. Definitely take some grit.
And he was a bull rider. That's right. Which,
I mean, come on, that's pretty fearless. That's
not for the faint of heart. No, it's not. No.
And then, you know, also he went to Thailand
to do mission work. Yeah. And that just shows,
you know, how much he cared about helping other
people. Yeah. He was really committed to helping
others. That's for sure. Yeah. So that's just,
you know, really paints a picture of somebody
who lived life to the fullest. Yeah, he embraced
it with passion and purpose. Yeah. You know,
and that's what makes it all the more heartbreaking
for his family. Yeah. You know, he leaves behind
his wife, Abby, and three really young kids.
Yeah. Bear, who's four, Claire, who's two. Oh,
my gosh. And little Axe, who's only one. Oh,
that's just heartbreaking. Yeah, it's just unimaginable,
you know, the kind of void that they're facing
now. It really is devastating. But, you know,
one of the bright spots, and I think we saw this
in the research too, is just how quickly the
Marshallville community came together to support
them. You know, it really shows you how strong
and interconnected these farming communities
are. Well, it's almost instinctive the way that
they mobilized. You know, neighbors didn't wait
to be asked. They just stepped in right away
to make sure that, you know, things kept running.
L &R dairy farm. Right. Taking care of the animals.
Taking care of the animals, all the daily stuff.
Wow. They organized meals for the family. And
most importantly, they offered that, you know,
that emotional support that's so important at
a time like this. I mean, it really, it wasn't
just practical help, you know, they also gave
a lot of financial support too. Yeah, that's
right. The GoFundMe was just incredible how generous
people were. Yeah. And that really underscores,
you know, that sense of shared responsibility
that they have in the dairy community. You know,
it reminds us that even though farming can be
kind of a solitary profession, when times get
tough, there's a really powerful safety net.
Absolutely. You know, and it's there waiting
to be activated. Yeah. And I think if we zoom
out a little bit, it just speaks to what makes
these agricultural communities so unique. Right.
You know, it's generations of shared experience.
Understanding the challenges of farm life. Yeah.
The ups and downs. Yeah. And just that sense
that, you know, we're all in this together. We're
in this together. And when one family hurts,
the whole community hurts. That's right. And
that's what we see. you know, and how they respond.
Yeah, it's a real demonstration of their values.
Absolutely. So this tragedy has also brought
up something really important that we need to
talk about, you know, and that's safety on dairy
farms. Right. And specifically when it comes
to manure storage. Yeah, that's right. And I
think the first step is just understanding the
risks that are already there. You got it. Manure
storage is just part of modern dairy farming,
but it's really dangerous if you're not careful.
Right. There are two main risks that we have
to be aware of. OK, let's break those down. So
the first one is these toxic gases that can form.
Right. How does that happen and what makes them
so dangerous? Well, when manure decomposes, it
releases gases naturally. Things like hydrogen
sulfide, which is super toxic. Yeah. Methane,
carbon dioxide and ammonia. Wow. So it's not
just one thing, it's a whole cocktail of dangerous
stuff. That's right, and they can build up really
quickly. Okay. Especially if you're agitating
the manure. Right, like when you're mixing it?
Yeah, exactly, when you're mixing it before you
use it as fertilizer. So it can happen suddenly
then? Yeah, because when you agitate it... all
those gases get released really fast. So it's
not just something that builds up slowly over
time. Not necessarily, no. This could happen
during regular work on the farm. Exactly. And
that's why it's so important to understand how
these gases work. Yeah. So we can, you know,
keep everyone safe. Yeah. And, you know, I remember
in the research, Dr. Thomas Sanderson from Iowa
State University. Right. I know Dr. Sanderson.
Yeah. He's done a lot of research on farm safety.
He's the expert. And he was saying that during
agitation, the hydrogen sulfide levels, can just
spike. Yeah, super fast. Like really fast. Yeah,
in just a few minutes. Wow, that's scary. Yeah,
it's definitely something to watch out for. Yeah,
so that's definitely something to be aware of.
And then the other risk you mentioned was physical
entrapment. Yeah, right. What's the danger there?
So liquid manure, you know, it's really thick
and dense. Right. Almost like a slurry. Yeah.
So if you fall in, it's really hard to get out.
Oh, gosh. You could drown, you could suffocate.
Oh, wow. And the thick liquid can actually suck
you in. So you can't even pull yourself out.
Right. It makes it even harder to escape. Gosh,
that's a really scary thought. Yeah. So knowing
all of this, what are some things the dairy farms
can do to be safer around manure storage? We
got to be proactive. Yeah. The most important
thing is to protect the storage areas themselves.
Okay, how do you do that? So first you put up
a strong fence all the way around to keep people
and animals out. And then you put locks on all
the gates. And then you've got to have clear
warning signs at every entrance so people know
it's dangerous. Right, right. And then I guess
you'd also want to have something to keep the
tractors and equipment away from the edge. Exactly.
You need barriers to stop them from getting too
close. Okay, so that makes sense. Yeah, just
keeping people away in the first place. Right.
Prevention is key. But what about, you know,
using technology or something to monitor the
area? Are there any tools that can help? Yeah,
definitely. So there are personal hydrogen sulfide
monitors. Okay. They're like little devices you
wear. And if the hydrogen sulfide gets too high,
they'll set off an alarm. Oh, that's pretty cool.
Yeah. And then ventilation is really important
too. Okay. Especially in... enclosed spaces like
the barns yeah exactly okay you need good airflow
to keep the gases from building up right so you
can use natural ventilation or you can use fans
fans okay and you know with any equipment like
that yeah you gotta check it regularly make sure
it's working properly right right and then just
having a plan you know like a set of steps For
when you're doing something like agitating the
manure. Exactly. You need clear procedures. Yeah.
So everyone knows what to do and how to stay
safe. Okay. So it's a combination of, you know,
keeping people out and then using technology
to warn you if something's wrong. Right. What
about the actual work that you do around manure
storage? Are there any specific practices that
are safer? Yeah. The Farm Safety Association
has some good recommendations. What do they say?
Well, one of the simplest things is to always
work with a buddy. Okay. That way someone can
help you if something happens. Right. So you're
not out there alone. Exactly. And it's really
important to be able to communicate. Yeah. So
use radios or hand signals. Okay. So you can
let each other know if there's a problem. Right.
And then I guess you'd want to have really specific
instructions for. Anything you're doing with
the manure. That's right. Detailed protocols
for things like agitation and transfer. Okay.
And those protocols need to be followed every
single time. No cutting corners. No cutting corners.
And always make sure there's plenty of ventilation
whenever you're working with manure. Okay. And
then another really basic thing. Yeah. Is to
stay away from the edge of the pit when you're
operating equipment. Just common sense. Exactly.
Common sense, but it's easy to forget sometimes.
So it sounds like a lot of it comes down to,
you know, planning ahead. being really careful
and following all the safety rules. Right. You
got to be meticulous and you got to be aware
of your surroundings. Yeah. Are there any resources
out there that can help farmers, you know, put
all of this into practice? Oh, yeah. There's
tons of resources. You can talk to your local
agricultural extension office. They can give
you advice specific to your farm. Okay. And a
lot of... Insurance companies actually offer
free safety assessments. Oh, wow. So they'll
come out to your farm and help you identify any
potential hazards. Oh, that's great. Yeah, it's
really helpful. And then OSHA has guidelines
specifically for manure storage. That's right.
Oh, okay. And there are a bunch of farm safety
organizations that offer training programs and
educational materials. So there's really no excuse
for not knowing how to be safe. Right. The information
is out there if you look for it. And that brings
us back to the community aspect. It's not just
about each farm doing their own thing. It's about
working together. Exactly. So how can the community
help with safety? Well, farmers can share information
with each other. You know, if someone finds a
safety measure that works really well, they can
tell their neighbors about it. Right. And neighbors
can check in on each other. Yeah. Especially
when someone's doing something risky. Right.
Like agitating manure. Yeah. To make sure everything's
OK. Exactly. And some communities even pool their
money together. Oh, wow. To buy expensive safety
equipment. Oh, that's a great idea. Yeah. So
everyone can benefit. That's really smart. And
I guess just talking about safety more openly.
Yeah. You know, making it. okay to ask for help.
Exactly. Create a culture of safety. Yeah. And
it seems like that's already happening, you know,
with how they all rallied around Reed's family.
Right. They really came together to support each
other. So hopefully that same spirit can help
prevent something like this from happening again.
I hope so. Yeah. You know, it's just a reminder
that farming can be dangerous. It's a tough job.
Yeah. And we need to do everything we can to
keep each other safe. Absolutely. And if we all
work together to improve safety. We're honoring
Reed's memory in a really meaningful way. Yeah,
it's about protecting other families from going
through the same thing. Right, it becomes a shared
responsibility. Yeah, and we know the dairy community
is strong. They are. So they can definitely do
this. They can support each other and keep each
other safe. So, you know, it's not just about
remembering Reed. It's about making sure that
his legacy includes a commitment to safety. Absolutely.
And I think that's something that everyone in
the agricultural world can get behind. I think
so, too. It's just a really powerful story of
community and resilience. It is. And a reminder
that we all need to be looking out for each other.
That's right. So, you know, I guess as we think
about all of this. Yeah. The loss of reed is
just a huge reminder of how strong the dairy
community is. Absolutely. And how important it
is to be safe. You know, especially when it comes
to manure pits. Absolutely. There are real dangers
there. Yeah. And we need to take them seriously.
No doubt about it. So for our listeners out there.
Yeah. What can you do? Think about what we've
talked about today. Yeah. And think about how
you can make your farm safer. Maybe talk to your
neighbors about it. Yeah. You know, share some
ideas and look out for each other. Yeah, absolutely.
And, you know, we've mentioned some resources
today, so check those out. Yeah, there's a lot
of help available. And, you know, once again,
we just want to send our condolences to Abby
and the kids. Yeah. And the whole Marshallville
community. Our hearts go out to them. From personal
loss to financial vulnerability. Our next story
shifts focus to the hidden risks revealed by
collapsing egg prices. The egg market collapse
has exposed financial weak points in dairy operations.
This urgent analysis highlights how price volatility
can impact your farm and offers strategies to
safeguard against future shocks. Okay, so you've
sent us some really interesting stuff this time.
A lot of it seems to be about how stable are
markets, really, and specifically you're asking
about the dairy market. Yeah. I mean, it's no
wonder, right? I mean, you're looking at what
happened recently with, you know, another big
part of agriculture and wondering, like, could
that same kind of thing happen to dairy? Right.
Exactly. So today what we really want to do is
sort of like get into all this information you've
sent and figure out like what are the warning
signs? What are the things that could go wrong
in the dairy market? And how can our listeners
be, you know, prepared for those possibilities?
Yeah. And I think a good place to start is with
something that seems unrelated at first, but
actually might be like a canary in the coal mine.
Okay. The egg market. Uh -huh. Recently saw some
really dramatic shifts, and those shifts could
be a warning for dairy, even though they're different
products. Right. But we need to understand what
happened with eggs to see why it matters for
dairy. Okay, so let's dive into this egg thing.
What exactly went down? The numbers are pretty
shocking, to be honest. Okay. Wholesale egg prices,
they just completely tanked, like plummeted 48%.
Oh, wow. Went from $8 .05 a dozen down to $4
.15 a dozen. This wasn't a slow, gradual decline.
No. This happened over just a few weeks. Wow.
Late February, early March of this year. So that's
a huge drop. And it happened fast, what was going
on. Yeah. And I think that's the really important
thing to notice here. It wasn't a gentle easing
down of the market. Right. It was like, boom,
sudden drop. Yeah. And what drove that was basically
consumers hitting their limit. They just said
no more. They just said these prices are too
high. We're not buying it anymore. Right. And
that's a really crucial lesson for dairy farmers
to be aware of. Because it could happen to them,
too. Exactly. Consumers have a lot of power when
they decide they're not willing to pay a certain
price anymore. OK, so for anyone out there who's
thinking, you know, my business is milk and dairy
products. This egg thing seems pretty irrelevant.
I want to make sure we connect the dots for them.
Like, why should they care about this egg market
crash? Well, the thing is, eggs and dairy. They
have some important similarities when it comes
to how they're produced and sold. Okay. Both
of them are perishable. Right. They go bad if
you don't use them. Exactly. You can't just let
them sit around forever. And the other thing
is their production isn't easily adjustable.
Right. Like you can't just turn off the milk
tap or tell the chickens to stop laying so many
eggs, right? Exactly. It takes time to ramp production
up or down. So if demand suddenly drops, you
can end up with a lot of product you can't easily
get rid of. Oh, that's a good point. I hadn't
thought of it like that. And remember, this egg
price crash, it happened right before Easter
and Passover. Those are usually times when egg
demand goes up because of all the baking and
cooking people do. Right. So the fact that prices
still plummeted, even with those holidays coming
up, it suggests that consumer price resistance,
it can overpower even seasonal increases in demand.
So even though, you know, there's a certain time
of year when people usually buy more of something,
if the price is too high, they're just going
to say no. Exactly. Yeah. It's a powerful reminder.
that consumer behavior can really shift quickly.
Wow. Okay, so we've got this sort of like case
study almost of what happened with eggs. Now
let's talk specifically about dairy. Are there
people out there who are looking at this and
saying, hmm, this might be something we need
to worry about in milk too? Yeah, absolutely.
There are... dairy economists who are definitely
paying attention to this egg situation and wondering
if there are some parallels to dairy. Okay, like
who are some of the experts we should be listening
to? Well, you've got folks at places like Cornell
University. They have a program called ProDairy.
They're really focused on the economics of dairy
farming. And then you've got the University of
Wisconsin -Madison. They have their Center for
Dairy Profitability. And both of these groups,
they're starting to kind of sound the alarm a
little bit. They're looking at what happened
with eggs and they're saying, OK, are there any
signs that something similar could happen with
milk? And what are they finding? Well, it's not
a perfect one to one comparison. You know, eggs
and milk are different. Right. But there are
enough similarities that I think it's worth paying
attention to. OK. And, you know, I do remember
reading something by a dairy economist from Wisconsin.
I think his name was Dr. Mark Stevenson. Yeah,
he's really well respected in the field. And
he was kind of saying that. you know dairy might
be a little bit different from eggs in terms
of how consumers react to price changes yeah
that's right he was pointing out that historically
the demand for dairy products it hasn't always
been as sensitive to price swings as eggs have
been okay so in other words Even if milk prices
go up a little bit, people don't necessarily
immediately stop buying it. Like they still need
their milk for their cereal and their coffee.
Right, exactly. And he also highlighted that
the dairy sector, it has a lot more variety in
terms of products. You've got your liquid milk,
of course, but you've also got cheese, yogurt,
butter, ice cream, all these different things.
Right. So it's not just one single product like
eggs. Exactly. And that diversity in the dairy
market, it could potentially help. to kind of
cushion the blow if one particular category,
if milk prices spike, for example, maybe people
will just switch to more yogurt or something.
Okay. So it's not a perfect analogy to eggs,
but even with those differences, those experts
are still saying, hmm, this egg thing is worth
paying attention to. Yeah, absolutely. I think
it's a wake -up call. Okay. It shows that consumers
are not afraid to push back on prices. And when
they do, the effects can be... really sudden
and really dramatic. And we are starting to see
some signals within the dairy market itself that
maybe things aren't quite as stable as we thought
they were. What kinds of signals are we talking
about? Well, the USDA, they recently revised
their forecast for milk prices. They actually
lowered their projection from $23 .05 per hundredweight
down to $22 .60. Okay, so that's not a huge drop.
Not a huge drop, but it's significant. Because,
you know, in the dairy industry, margins are
already pretty tight. Right. Every penny counts.
Exactly. And this price adjustment, it's happening
at the same time that dairy farmers are facing
all kinds of rising costs. Like what? Feed costs,
energy costs, labor costs. All those things are
going up. Right. So this kind of mirrors what
was happening in the egg market before those
prices crashed. Input costs were high. And then,
boom, demand just fell off a cliff. So we might
be seeing the same kind of setup in dairy right
now. It's a possibility that we need to be aware
of. Okay. And another thing that's kind of adding
to the uncertainty is that the USDA, their projections
for dairy product prices have been a little bit
volatile lately. Like they're going up and down.
Yeah. At first they were projecting increases,
then they had to adjust them downwards. And all
of this volatility suggests that... Maybe the
market's trying to find its footing. Right. Maybe
it's not sure which way it's going to go. Exactly.
And that can make it really hard for dairy farmers
to plan for the future. Okay. So we've got these
signs that consumer demand might be softening.
Maybe prices are a little bit too high. We're
not really sure what's going to happen with demand.
There's another big factor in all of this, right?
Yeah. And that's these alternative proteins that
are coming onto the market. That's right. And
the timeline for those alternatives becoming
really competitive, it's sped up quite a bit.
Oh, really? Like how soon are we talking? Well,
the projections are showing that plant -based
alternatives, you know, those are already out
there. They're already pretty popular. Yeah.
And they're either already at price parity with
traditional animal products or they're about
to be. Wow. And then you've got proteins that
are made from microorganisms like fungi and yeast.
Okay. Those are actually expected to hit price
parity as early as this year. This year. Wow.
Yeah. And then even further out, you've got these
cultured proteins, you know, the ones that are
grown in a lab. Right. These are called lab -grown
meat and stuff. Exactly. And those are projected
to be cost competitive within the next decade.
So that's not that far off. No, it's not. And
that must be pretty concerning for the dairy
industry. It is. I think it's something that
they need to be taking very seriously because
it means that relying on just being cheaper than
the alternatives, that's not going to be enough
anymore. Especially if consumers are already
starting to push back on prices anyway, right?
Exactly. You've got this kind of... Perfect storm
brewing. You've got consumers who are becoming
more price sensitive and you've got these alternatives
that are becoming more affordable and more appealing.
Right. And so if dairy prices stay high and these
alternatives are cheaper, well, people are just
going to switch over. That's the risk. And once
those consumers make that switch, they might
not come back. Right. They might just decide
that, you know, the alternative is good enough
and it's cheaper. So why bother going back to
the traditional dairy? Exactly. And one of the
things that's really changing the game. with
these alternatives is this technology called
precision fermentation. Precision fermentation,
what's that? So it's kind of like brewing, but
instead of brewing beer, you're brewing specific
proteins. Like milk proteins. Yeah, exactly.
They can use this process to create things like
beta -lactoglobulin. Beta -lactoglobulin. That's
one of the main proteins in whey. Oh, okay. And
they can also make different types of casein.
Right. Those are the proteins in milk. Right.
And the key here is that these proteins that
they're making through fermentation, they're
not just similar to the ones in cow's milk. They're
identical. Wow. So it's not like a plant -based
milk that's trying to taste kind of like milk.
This is actually the same stuff. Exactly. It's
molecularly identical. Okay. So does that mean
that, you know, the argument that traditional
milk has all these unique nutritional things
that you can't get anywhere else, that's not
true anymore. Well, it's getting more complicated.
Okay. It's true that traditional milk has a really
complex nutritional profile with a lot of different
components that we're still learning about. Right.
And those might be harder to replicate exactly
through fermentation or other methods. Okay.
But for a lot of people, the main thing they
care about is the protein content. Sure. And
if they can get that same protein from a source
that doesn't involve cows and it's cheaper, well,
that's a pretty compelling argument. Okay, so
this is a lot for dairy farmers to think about.
Yeah, it's a lot to digest. And I'm wondering,
you know, are some parts of the country more
vulnerable to these pressures than others? Yeah,
definitely. And there's actually a tool that's
been developed to assess this. It's called the
U .S. Regional Vulnerability Index. The U .S.
Regional Vulnerability Index. Okay. And it looks
at different factors like consumer behavior in
different parts of the country and how much competition
there is from alternative proteins and things
like that. Okay. And what it shows is that California,
it's actually facing the highest vulnerability
right now. Really? California? Yeah, they have
a score of 4 .6 out of 5 on this index. Wow,
so that's pretty high. Why is California so vulnerable?
Well... It's probably a combination of things.
You know, California tends to have higher concentrations
of people who are already maybe a little bit
more price sensitive. Okay. They're also more
likely to be aware of and have access to these
alternative protein options. Right. So it's kind
of like the perfect storm for dairy vulnerability.
Hmm. On the other end of the spectrum, who's
doing the best? On the other end of the spectrum,
you've got the upper Midwest. Okay. They have
the lowest vulnerability score, three out of
five. So they're doing pretty well. Why is that?
Well, probably because dairy is such a big part
of the culture there. Right. People have been
drinking milk and eating cheese for generations,
and they might be a little bit less likely to
switch to alternatives. Okay, so you've got California
at one end, the upper Midwest at the other. What
about the retail country? Yeah, so the Northeast
scores pretty high on this vulnerability index,
4 .3 out of 5. Wow. And then the Southeast is
kind of in the middle, 3 .6. The southwest is
a little bit higher at 4 .1. Right. And then
Wisconsin, which you might think would be really
low, given how much dairy they produce. Right.
They're actually a little bit higher than the
upper Midwest overall. They're at the 3 .1. Interesting.
So, yeah, it really varies across the country.
Okay. So given all this stuff we've been talking
about, like what can dairy farmers actually do?
It can feel like that. But the point isn't to
scare people. It's to give them tools to be prepared.
Okay, good. And there are things that dairy farmers
can do to protect themselves and their businesses.
Okay, good. I was hoping you were going to say
that. So there are four main strategies that
I want to talk about. Okay, let's hear them.
The first one is what I call setting up a price
sensitivity detection system. A price sensitivity
detection system. What is that? It basically
means that you need to actively figure out where
that breaking point is for your consumers. OK,
so like how much are they willing to pay before
they say no more? Yeah, exactly. And this applies
whether you're selling your products directly
to consumers or if you're going through wholesale
channels. OK. The key is to not just assume that
you know what your customers are willing to pay.
You need to actually test it and find out. So
how would a dairy farm actually do that? Like,
are they supposed to be doing market research
surveys and all that stuff? Well, for farms that
sell directly to consumers, it can be as simple
as trying out different prices for their products.
Like maybe they run a special for a week and
see how sales respond. Or maybe they raise the
price a little bit and see if people stop buying.
They could also just talk to their customers,
get feedback, ask them what they think about
the prices. Right, just have a conversation.
Exactly. For farms that sell through wholesale
markets, it's more about... Staying in close
contact with their processors. Get data on what's
selling at retail at different price points.
See how sales fluctuate when prices change seasonally.
And keep an eye on what's happening with those
alternative products in their markets. And the
interesting thing is that research has shown
that farms that actually do this, that actively
monitor and respond to price sensitivity, they
tend to do better financially. So there's a real
payoff to paying attention to those price signals.
Exactly. And it's not just about reacting after
the fact. It's about being proactive and anticipating
those changes. Okay. So that's the first strategy.
What's the second one? The second strategy is
product diversification. Product diversification.
Okay. But I don't just mean making five different
kinds of cheddar cheese. Okay. This is about
thinking about diversification in two different
ways. Okay. The first way is what I call processing
depth. Processing depth. So this is about moving
beyond just selling raw milk. You know, raw milk
that's like the most basic level, primary level
of dairy production. Okay. But you can go further
than that. You can start doing more processing
on the farm. Like what? Well, maybe you start
making yogurt or some simple fresh cheeses. Okay.
That would be the secondary level of processing.
Then maybe you move into aged cheeses, specialty
butters, that kind of thing. Okay. That's the
tertiary level. And then you can even go further.
and start creating these really unique, high
value specialty items. Like what kinds of things
are we talking about? Could be anything from
really unique artisanal cheeses to flavored butters
to dairy based desserts. You know, get creative.
Oh, I like that. That's the quaternary level
of processing. So you're basically saying that
the more steps you take in the processing chain,
the more diversified your products become. Exactly.
And that gives you more options. If one market
starts to soften. Yeah. you can shift your focus
to another one. Okay, so that's processing depth.
What's the other dimension of diversification?
The other dimension is market channel diversity.
There's a channel diversity. So instead of just
relying on those big commodity wholesale markets,
which can be really volatile, you can start exploring
other ways to reach consumers. Like what? Well,
you could set up a farm store and sell directly
to people. You could sell online through your
own website. Or through farmers markets, you
could partner with local restaurants and cafes
who are looking for high quality local ingredients.
Right. Those farm to table places are really
popular now. Exactly. And you could even look
into exporting your products to other countries.
So the basic idea is don't put all your eggs
in one basket. Exactly. And research has actually
shown that farms that have more diverse market
channels, they tend to have much less fluctuation
in their income when markets get rough. Okay.
So diversify, diversify, diversify. Got it. What's
the third strategy? The third strategy is to
invest in technology that gives you market flexibility.
Okay. Technology that gives you market flexibility.
So that's different from just... you know, buying
the latest and greatest equipment that's going
to make you more efficient. Right. It's not just
about being efficient. It's about being able
to adapt quickly when the market changes. Okay.
Because if you can't adjust your production or
your products when consumer demand shifts, you're
going to get left behind. That makes sense. And
there's actually a way to kind of assess this.
They call it the market volatility protection
score. The market volatility protection score.
Okay. Who came up with that? The Dairy Innovation
Hub at the University of Wisconsin -Madison,
they developed it. Okay, so how does it work?
They basically look at different technologies
that dairy farmers might invest in and they rate
them on how well those technologies can help
them adapt to market changes. Okay, so like what
kinds of technologies get high scores on this
market volatility protection score? Well, things
like precision feeding systems. Okay. And advanced
herd management software. Those tend to do really
well because they give you a lot of control over
your inputs and your production levels so you
can make adjustments quickly if you need to.
So you can respond to the market in real time.
Exactly. And investing in on -farm milk processing
equipment, that also gets a pretty good score
because it gives you the ability to change what
products you're making. Right. If demand for
milk goes down, you can switch to making cheese
instead. Exactly. Yeah. But things like robotic
milking systems, those might be great for efficiency.
Yeah. But they don't necessarily give you that
same level of flexibility to quickly change your
production. OK. So they might get a lower score
and then things like renewable energy systems.
Those are really important for sustainability
and long term cost reduction. Right. But again,
they might not have a huge impact on your ability
to quickly adapt to market changes. So it's all
about picking the right technologies for your
specific. needs and goals. Exactly. And it's
worth noting that there are also things that
the industry as a whole can do to help stabilize
the market. Okay. Like what? Well, the National
Milk Producers Federation, they've been talking
a lot about the importance of better market coordination
and maybe some policy changes that could help
smooth out those price swings. So it's not just
about individual farms. It's about the whole
system working together. Exactly. Okay. So we've
talked about price sensitivity detection. We've
talked about product diversification and we've
talked about investing in flexible technology.
That's three. What's the fourth strategy? The
fourth strategy is about building value beyond
just price. Building value beyond just price.
Okay, what does that mean? It means that you
need to give consumers a reason to choose your
products, even if they're not the absolute cheapest
option on the shelf. Okay, so how do you do that?
Well, one example is focusing on consistently
high quality. Okay. You know, going above and
beyond the minimum standards, really making sure
that your products are the best they can be.
So you're building a reputation for excellence.
Exactly. And where it's legally allowed, producers
could work together to kind of pool their resources
and market their products collectively. Okay.
That's interesting. So it's like a cooperative
approach. Right. And another thing is developing
unique value -added products. Okay. You know,
things that you can't find just... anywhere.
Things that have a story behind them, a connection
to your farm or your region. Right. So you're
giving people something special, something they
can't get from those big industrial producers.
Exactly. And then you've got brand development,
you know, creating a recognizable brand that
people trust and that they associate with positive
things like sustainability or animal welfare
or supporting local farmers. Right. So it's not
just milk, it's... you know, milk from a farm
that I believe in and that I feel good about
supporting. Exactly. And there's some good examples
of this if you look at the Canadian dairy system.
Oh, interesting. Okay. They've been pretty successful
at building a strong brand and a sense of value
around their dairy products. And they've been
able to kind of weather those price storms a
bit better. because of that? Yeah, I think so.
And there are also some cautionary tales. You
know, there are examples of dairy industries
that kind of resisted innovation or got complacent
because they thought they were protected and
they ended up struggling. Right. So even if things
seem stable right now, you can't just rest on
your laurels. Exactly. You've got to be constantly
looking ahead and thinking about what's next.
Okay, so we've talked about four main strategies
for dairy farmers to kind of protect themselves
from these market pressures. Are there any other
sort of like red flags, warning signs that they
should be on the lookout for? Yeah, there are
some specific things that can indicate that consumers
are starting to hit that breaking point on price.
Okay, like what? Cornell's ProDairy program,
they've identified five key warning signs. Five
key warning signs. Okay, I'm all ears. The first
one is if you see the gap between retail prices
and farm prices widening. Okay. So what that
means is that processors and retailers, they're
absorbing some of those price increases instead
of passing them on to consumers. Okay, but that
can't last forever, right? No, eventually it
puts pressure back on farm gate prices because
those processors and retailers, they're going
to start pushing back and saying, we can't keep
taking the hit on this. Right, they need to make
a profit too. Exactly. So that's warning sign
number one. Warning sign number two is if you
see inventory levels starting to rise. Inventory
levels. Okay. Like what kinds of inventory? Well,
particularly things like cheese and butter. If
you see those stockpiles growing and it doesn't
seem to be for any seasonal reason, that's a
sign that demand might be slowing down. Okay.
Warning sign number three is if you see private
label market share increasing. Private label
market share. Okay, so that's like the store
brand stuff. Exactly. And when consumers start
switching from those name brand dairy products
to the cheaper store brands, that's a sign that
price is becoming a much bigger factor in their
decisions. Okay, so they're trading down to save
money. Exactly. Warning sign number four is if
you see purchase frequency declining. Purchase
frequency, okay. So that means that people are
just buying dairy products less often. Okay.
And that could be because they're trying to be
more budget conscious or it could be because
they're finding alternatives that they like better.
Okay, so it's a sign that maybe dairy isn't as
essential to their diet as it used to be. Right,
exactly. And then the fifth warning sign is substitution
within dairy categories. Substitution within
dairy categories. Okay, so like what does that
mean? It means that maybe people are switching
from premium cheeses to more basic cheeses. Okay.
Or... They're switching from organic milk to
conventional milk. Right. So they're still buying
dairy, but they're choosing the cheaper options.
Exactly. And that's another sign that they're
hitting that price limit. Okay. So those are
five really concrete things that people can watch
for. Yeah. They're all things that you could
track and measure and they can give you an early
warning. Yeah. That, you know, maybe some changes
are coming. Okay. That's really helpful. No,
you mentioned earlier a case study of a dairy
farm that had done a good job of kind of diversifying
and being prepared for these kinds of challenges.
Yeah, Maplewood Dairy in Vermont. They're a great
example. Okay, tell me about them. So they had
gone through some tough times a few years ago
when milk prices dropped and they realized that
they needed to do something different. Okay.
So they started making their own cheese on the
farm. Okay. They opened up a farm store so they
could sell directly to consumers. They started
selling online. And they also partnered with
some local food co -ops. OK, so they really diversified
their market channels. Exactly. And they also
really focus on their brand. OK. You know, they
emphasize their pasture -raised practices, their
commitment to sustainability, all those things
that consumers are looking for. So they were
giving people a reason to choose their products
beyond just the price. Exactly. And it worked
when conventional milk prices dropped again last
fall. Maplewood's revenue only went down by 6%.
Wow, that's pretty impressive compared to the
17 % drop that a lot of other farms experienced.
Yeah, it's a huge difference. And the owner of
the farm, he's been really vocal about the importance
of paying attention to price sensitivity and
being proactive about... adapting to market changes.
Okay. So that's a really encouraging example.
Yeah. It shows that it can be done. Okay. So
I think we've covered a lot of ground today,
but I want to make sure that we leave our listeners
with the key takeaways. Yeah, absolutely. So
the big thing is that what happened in the egg
market, that price collapse, it's not just an
isolated incident. Right. It's a warning sign
for the entire agricultural industry, including
dairy. Exactly. And the reason it's a warning
sign is because it shows how quickly consumer
behavior can shift. Yeah. And when consumers...
decide they're not willing to pay a certain price
anymore, the effects can be really dramatic and
really fast. And the dairy industry is facing
this kind of double whammy right now. Yeah. On
the one hand, you've got consumers who are getting
more and more price sensitive. And on the other
hand, you've got these alternative proteins that
are getting cheaper and better all the time.
And so the old playbook of just focusing on efficiency
and producing as much milk as possible, as cheaply
as possible, that might not be enough anymore.
It's not enough. You need to be thinking about
diversification. You need to be thinking about
market flexibility. You need to be thinking about
building a strong brand and a loyal customer
base. You need to be thinking about all of those
things. Yeah. You need to be proactive. You need
to be adaptable. Yeah. And you need to be really
in tune with what your customers want. Okay.
So that's a lot to think about. It is. And for
anyone listening out there, you know, we encourage
you to take some time to really think about this.
Yeah. Think about what's happening in your region.
Think about how prepared you are for these potential
changes. Look at those warning signs that we
talked about. See if any of them are starting
to show up in your market. And don't be afraid
to reach out for help if you need it. There are
resources out there. There are people who can
help you navigate this. Okay, great. So we've
given you a lot to digest today. We have. But
hopefully it's been helpful. I hope so. While
some markets struggle, others are seeing unexpected
surges. Let's explore how butter prices are defying
predictions. Butter prices have skyrocketed by
27%, catching many off guard. as USDA forecasts
remain bleak. This story unpacks the factors
behind this surge and what it means for producers
moving forward. Right, so we're diving into some
interesting stuff in the dairy world today. Yeah,
definitely. We've got this kind of strange situation
on our hands. Yeah. Butter prices in Europe have
absolutely exploded, like up 27 % compared to
a year ago. Right. You'd think, okay, boom, dairy
market must be on fire. Everyone's making money.
Yeah, you would think. But then you see the USDA.
you know, right here in the U .S., they're actually
lowering their outlook for milk prices in 2025.
Yeah, it's a real head -scratcher, isn't it?
It is. So that's what we're going to unpack today.
Yeah. Why are we seeing these, you know, these
seemingly conflicting signals? Yeah. What's really
driving this? Absolutely. And most importantly,
what does it mean for, you know, anyone listening
out there? Right. For their dairy operation?
Absolutely, because that's... That's the real
takeaway here. This isn't just about some, you
know, abstract market data. This is about understanding
the forces that are shaping the industry. Exactly.
And ultimately what it means for your, you know,
for your bottom line. Exactly. And we've got
some really interesting information to dig into
today. Yeah. We're going to be looking at market
reports. Yeah. You know, actual price data. Right.
And then we've got those USDA projections for
2025. Yeah. The USDA outlook is always interesting.
It is. Gives us a kind of a glimpse into, you
know, what they're thinking, where they see things
headed. Yeah. So let's get into it. All right,
let's do it. So one of the first things that
really jumps out is this real divide between
the value of fat and the value of protein. Yeah,
absolutely. It's stark, isn't it? It is. And,
you know, the numbers coming out of Europe are
pretty remarkable. Butter prices, like you said,
up over 27%. Right. Cheddar curd, you know. almost
19 percent higher wow mozzarella cheese almost
16 percent right and this is all compared to
last year but then on the flip side you've got
skim milk powder right which is you know your
protein side of things right only up a little
over one percent yeah and in fact it even dipped
a bit this past week wow so there's a clear preference
for fat right now yeah it seems that way um and
and you know one of the things that that we saw
that really really highlighted this was this
quote. Oh yeah, I remember that. It said, the
days of being paid for white water are numbered.
The market is screaming for fat while protein
values struggle. Yeah, that's a pretty powerful
statement. It is. And it really gets to the heart
of this shift we're seeing. Right. The market
is placing a premium on fat. Right. And if you're
a dairy producer, that's something you really
need to pay attention to. Yeah. So what does
that mean for producers? Well, it means thinking
strategically about how they can, you know, maximize
the fat content in their milk. Right. We're talking
about things like nutrition. Right. You know,
making sure the cows are getting the right feed.
Right. To optimize for fat production. Right.
And even, you know, looking at genetics. Yeah.
Breeding for cows that naturally produce milk
with a higher fat content. It's not just about
volume anymore. It's about the components. It's
about producing the type of milk that the market.
is demanding. Exactly. So we've got this clear
signal from Europe. Yeah. Strong demand for fat.
But then you've got the USDA and their outlook.
Yeah. And it's almost like they're looking at
a different world. Yeah. It is interesting, isn't
it? It is. Because they've actually lowered their
forecast for the all milk price in 2025 by a
full dollar. A whole dollar. That's significant.
It's now down to $21 .60 per hundred weight.
Right. And that's per hundred pounds of milk.
Right. Just to clarify. For anyone who's not
familiar with the term. Yeah. And it's not just
the price. Right. They've also lowered their
production forecast slightly. Yeah. From, what,
about 102 .92 million tons down to 102 .6 million
tons. Right. And what's interesting is they're
attributing that to a... A decrease in milk production
per cow. Right. Which is kind of counterintuitive.
It is because you would think with all the advancements
in genetics. Yeah. And management practices.
Right. You'd think we'd be getting more milk
per cow. All right. So what's going on there?
Well, it's hard to say for sure, but it suggests
that they're anticipating some other factors.
Right. That might be impacting milk yield. Like
what could use be? Well, it could be things like,
you know, broader economic conditions. Maybe
they're seeing some signs of, you know, a slowdown
in consumer spending. Right. Which could impact
demand for dairy products. Yeah, makes sense.
Or it could be shifts in international trade.
Right. You know, maybe they're anticipating changes
in import -export patterns. Right. That could
affect overall milk supply. Yeah, so it's not
just about what's happening on the farm. Exactly.
It's about these bigger macroeconomic trends
as well. Right. And, you know, the USDA is looking
at all of that when they're making their forecasts.
And these downward revisions aren't affecting
all types of milk equally. Right. Class 3 milk,
which is, you know, often used for cheese. Right.
Class 4 milk, which is used for butter and milk
powder. Right. Those are facing even steeper
declines. Yeah. The forecast for class 3 milk
is down $1 .15. Wow. To $17 .95 per hundredweight.
Right. And class four milk is down 90 cents to
$18 .80. Right. So that's going to be a, you
know, real concern for producers whose milk goes
into those categories. Absolutely. Because, you
know, their profitability is directly tied to
those prices. Right. And there's this warning
that really stood out to me. Oh, yeah. I remember
that. It said, are you basing your expansion
decisions on government forecasts that change
dramatically monthly? That's a dangerous game
few can afford to play. Yeah, that's a sobering
thought. It is. And, you know, it highlights
the fact that these forecasts, while they're
valuable, they are just that they're forecasts,
they're predictions, and they can change as new
information becomes available. And they do change.
They do. So, you know, you can't just blindly
rely on them. You've got to take them into account.
Right. But you also need to have your own, you
know, your own analysis, your own risk management
strategies. Absolutely. You've got to be thinking
for yourself. Right. So let's shift gears a bit.
Okay. Let's talk about what's happening in Europe
in terms of production. Right. Because it's interesting,
isn't it? It is. Yeah. We're seeing some pretty
significant decline. Right. France, their milk
production is down 1 .7 % compared to last year.
Right. And Germany, which is a huge player. Yeah.
They're a major producer in the EU. They're down
2 .2%. Yeah. Those are big drops. They are. And
Germany, they account for almost a quarter. About
23%. Of all EU milk production. Yeah. So that's
a significant chunk. It is. So what does that
mean for the European market? Well, it likely
means that processors are going to be facing
a more competitive environment. Right. You know,
when supplies tighten, everyone's scrambling
to get the milk they need. Right. And that could
drive prices up. It could. But then you have
Denmark. Right. They're actually seeing an increase
in production. Yeah. They're up a little over
1%. Right. And not only that, but their milk
is really high quality. Yeah, they've got high
component levels. Right, like 4 .63 % fat and
3 .75 % protein. That's impressive. It is. And
their milk solid collection is up too. Yeah,
about 2%. So they're really focusing on quality.
They are. And it seems to be paying off. Yeah,
so it's not just about how much milk you produce.
Right. It's also about the composition of that
milk. Absolutely. The quality, the components.
Right, because those components are what drive
value. Exactly. Okay, so we've got these kind
of contrasting trends in production. Yeah, tightening
supplies in some parts of Europe. Right. And
then the USDA projecting, you know, slightly
lower production here in the U .S. Right. And
all of this is happening against the backdrop
of some pretty significant activity in the dairy
futures market. It's a... It's kind of crazy
right now, isn't it? It is. Yeah, we're seeing
a lot of volume. Like over 16 ,000 tons traded?
Yeah, on the EEX and the SGX. Right, the European
and Singaporean exchanges. Right. And that's
a lot. It is. And you know what they say? What's
that? When futures traders get this active, they're
not just hedging. Right. They're panicking. Panicking.
The smart money sees something coming that average
producers don't. So what does that mean? Well,
it means that people who are really tuned into
the market, they're anticipating some big moves.
They're trying to position themselves to either
capitalize on those moves or protect themselves
from them. And that level of activity is unusual.
Yeah, it's definitely above what we would consider
normal. Right. So that's something to pay attention
to. Absolutely. So with all of this going on,
what are the key things that our listeners should
be watching? Well, there are five indicators
that are highlighted in what we've looked at.
First, any revisions to the USDA's WASDE report.
That's the World Agricultural Supply and Demand
Estimates. It's their forward -looking projections
for supply and demand. And those projections
really influence the price forecasts. They do.
Okay, so that's the first one. Yeah. Second,
the trading volume on the futures exchanges.
Right. The EEX and SGX. Right. If you see sustained
weekly volume above 7500 tons. Right. That could
be a sign of increased volatility. OK. Third,
the fat to protein price ratio. You know, we
talked about that premium for butterfat. Right.
That's something to keep a close eye on. OK.
Fourth. The trend in feed costs. Right. Because
that can really impact your bottom line. Absolutely.
Feed is a major expense for dairy producers.
So that's something to monitor closely. Yeah.
And finally, that somewhat puzzling forecast
for milk production per cow here in the U .S.
Right. Why is the USDA projecting a decline when
you would expect it to be going up? It's something
to keep an eye on. It is. So we've got a lot
to watch. We do. It's a complex picture, isn't
it? It is. You've got these strong fat values
in Europe. All right. But then this weaker outlook
for overall milk prices here in the U .S. Yeah,
it's a bit of a mixed bag. It is. And it seems
like this kind of environment is going to create
some winners and some losers. Absolutely. There
will be those who are well positioned to take
advantage of these trends and those who may struggle.
So who are the potential winners here? Well,
based on what we're seeing, producers who are
really focused on maximizing components, particularly
butterfat. Right. They're in a good spot. Yeah.
They can benefit from those high fat prices.
Right. Also, European cheese manufacturers. Right.
They're facing potentially tighter milk supplies.
Right. But demand for cheese is strong. Right.
So they could do well. Yeah. And what about producers
here in the U .S.? Well, those who have been
proactive about risk management, you know, using
hedging strategies to protect themselves from
price volatility, they're going to be in a better
position than those who haven't taken those steps.
Right. So being proactive is key. Absolutely.
And also those who are really efficient. You
know, they've got their costs under control.
Right. They can withstand some downward pressure
on prices. Right. Because their margins are healthier.
Exactly. So what about the losers then? Well,
those who are just focused on volume without
paying attention to components. Right. They could
find themselves in trouble. Right. Because if
the price of milk is declining. Right. But you're
not getting a premium for your components. Right.
then your margins are going to get squeezed.
Exactly. And what about those who haven't done
any risk management? Yeah, those who haven't
hedged. Right. They're exposed. Yeah. If those
USDA forecasts are accurate. Right. And prices
do come down. Right. They're going to feel the
pain. They are. And also those who have high
input costs. Right. Particularly for feed. Right.
They're going to be more vulnerable. Yeah, because
their margins are already tighter. Exactly. And
finally, those who are slow to adapt. Yeah. To
these changing market conditions. If you're not
paying attention. Right. And you're not making
adjustments. Right. You're going to fall behind.
Right. So it's all about being proactive. Absolutely.
Informed. Right. And adaptable. Those are the
keys to success. And our sources, they lay out
these five tough questions. Yeah. That every
dairy producer should be asking themselves right
now. These are really important questions. They
are. So let's go through them. All right. First,
given this premium on butterfat. Yeah. Are you
truly maximizing your butterfat production? That's
the first question. Second, how much of your
anticipated 2025 milk production is protected
against those lower USDA price forecasts? Right.
Have you hedged? Right. Have you taken steps
to lock in a price? Right. So that you're not
exposed to that downside risk. Right. Third,
are you positioned to benefit? if feed costs
were to decline okay so that's thinking about
your input cost exactly right are you structured
in a way right that you can capture those savings
right if feed prices go down fourth have you
really looked at your cash flow yeah and how
a lower average milk price would impact it right
because you've got to be able to pay the bill
absolutely right cash flow is king it is and
finally does your current plan for expansion
right still make sense given the reduced forecast
for Overall milk value. Right. So are you chasing
volume? Yeah. When maybe you should be focusing
on value. Exactly. Those are tough questions.
They are. But they're questions that every dairy
producer needs to grapple with. Absolutely. So
if we're looking at a strategic roadmap here.
Yeah. What are the key things that producers
should be doing? Well, I think the first thing
is to really focus on those component yields.
Right. Especially butterfat. Make sure you're
doing everything you can to maximize the amount
of butterfat in your milk. Second, implement
those risk management strategies. Hedging is
your friend. Protect yourself from price volatility.
Third, scrutinize your input costs. Look for
every opportunity to drive efficiency. Right.
And reduce those costs. Because every penny counts.
It does. Right. And finally, make sure you're
targeting the right markets. Okay. You know,
understand what product streams are most profitable
and make sure your milk quality is aligned with
those markets. So it's not just about producing
milk anymore. Right. It's about producing the
right kind of milk. Exactly. And managing your
business in a smart and strategic way. Absolutely.
This isn't time for business as usual. God. The
market is changing. Yeah. And you need to change
with it. So to sum it all up, the dairy market
in 2025 is a complex and potentially volatile
picture. Yeah, there's a lot going on. We've
got this strong emphasis on butterfat value,
particularly in Europe. But then this downward
pressure on overall milk prices. Especially here
in the U .S. Yeah, so it's a real balancing act.
It is. And the decisions that producers make
today are going to have a big impact on their
future. So as we leave our listeners today, I
want to leave them with this thought. How might
these global shifts and this divergence between
the value of fat and protein How might that reshape
the entire dairy industry in the years to come?
That's a great question. It is. It's something
to think about. It is. It's not just about the
immediate situation. Right. It's about the long
-term implications. Absolutely. And the potential
for really fundamental changes. Right. We could
be seeing a real transformation in the dairy
industry. So that's something for everyone to
ponder. Yeah, it's a lot to think about. It is.
Finally, we turn to international trade. where
tensions with China are creating ripple effects
for U .S. dairy farmers. China's decision to
block U .S. beef imports threatens billions in
revenue from cull cows. We'll explore how this
impacts dairy producers and what steps can be
taken to mitigate losses. Okay, folks, welcome
to another deep dive. You know, we like to roll
up our sleeves here and really dig into a story
that could really matter for your livelihood.
Oh, yeah, definitely. And today, we're looking
at something that's... particularly relevant,
I think, for anyone involved in agriculture and
specifically, you know, kind of focusing in on
the beef industry and, you know, kind of some
surprising connections it has to other parts
of agriculture. Yeah, for sure. So the story
that we're diving into is China's decision, seemingly,
to... not renew registrations for a whole bunch
of U .S. beef plants. So we're talking about
a significant number of facilities that are no
longer able to export to mainland China. And
we're going to be looking at a news article that
really breaks down what that means and kind of
the domino effect that this could have. Yeah,
and some of the places that domino falls are
pretty unexpected, I think. Exactly. So our mission
today is to really untangle this story and figure
out why it matters, especially if you're not
directly involved in the beef industry. What
are the surprising ways that this can ripple
through different agricultural sectors? And yeah,
maybe even hit your bottom line. Yeah, definitely.
I mean, like you said, it might seem like a pretty
specific trade issue at first, but the implications
are really far reaching when you start thinking
about the bigger picture. Right. So let's get
into the nitty gritty here. So around Sunday,
March 16th, 2025, the registrations for, I think
it's roughly 390 U .S. beef plants that were
operating under that 2020 phase one trade agreement
with China reportedly expired and were not renewed.
So, you know, for those who aren't familiar with
these kinds of trade agreements, can you just
kind of paint a picture of what that actually
means for these facilities? Sure. So basically,
those plants have lost their authorization to
export beef to China. You can think of it like
a permit that's expired. These registrations
were what allowed U .S. beef to enter that Chinese
market. And now for a lot of these facilities,
that door is essentially closed. And what makes
it even more kind of curious is that the registrations
for pork and poultry plants were actually renewed.
They were extended pretty far into the future,
all the way to 2030. Wow. Which makes the fact
that beef is being singled out even more striking.
You know, it raises questions about what's really
going on behind the scenes. Yeah, that's a big
question mark, why those two would be renewed
and beef specifically wouldn't. Yeah. So what's
the immediate economic fallout here? I mean,
we're talking about a major market potentially
being cut off. So, you know, what kind of figures,
dollar figures are we looking at? Yeah. So the
estimated potential loss in U .S. beef exports
because of this is somewhere around $4 .13 billion,
which is a huge chunk of change. You know, it's
a significant disruption to how U .S. beef has
been flowing into international markets. And,
you know, the news article we're looking at specifically
mentions that on China's General Administration
of Customs website, the status of these beef
facilities switched from effective to expired,
which is a pretty clear indication that this
isn't just a paperwork issue or you know some
sort of delay it's a deliberate decision on their
part yeah that's not a good sign so you know
this is where i think it starts to connect to
a wider audience and you know particularly for
our listeners um how does this beef export issue
with China potentially impact, say, a dairy farmer
here in the U .S.? Right. So this is where it
gets really interesting. This connection is something
that a lot of people might not realize. So for
dairy farmers, a significant portion of their
income besides selling milk obviously comes from
selling cull cows. These are cows that maybe
aren't producing as much milk anymore, so they're
sold for beef. And when you have these export
opportunities limited, like we're seeing with
China, it means more of that beef that would
have gone overseas ends up staying in the domestic
U .S. market. And when you have an increase in
supply, naturally, that's going to put downward
pressure on prices. And that includes the prices
paid for coal cows. So a dairy farmer who's planning
to sell some coal cows could suddenly be facing,
you know, a much lower price than they were expecting
because of this situation with China. Wow. It's
like a domino effect. Yeah, exactly. It's an
indirect consequence, but it's a very real one.
Less demand for U .S. beef in China leads to
more beef here at home. Yeah. And that drives
down the price for all beef, including those
cull cows from dairy farms. And, you know, what
makes this even more unfortunate is the timing
of all of this. The article points out that this
is happening when dairy margins are already pretty
tight. They've decreased by something like 11
percent. Right. Yeah. It's definitely a tough
time for dairy farmers. And when milk prices
are lower. that income from selling cull cows
becomes even more important. It's like a safety
net. You know, it helps them weather those storms
of low milk prices. But if that safety net is
also shrinking because of these depressed cull
cow prices, it puts them in a really tough spot.
Yeah, it's like that buffer they rely on is suddenly
a lot thinner. Exactly. So China restricts U
.S. beef and a dairy farmer, you know, thousands
of miles away feels the pinch in their wallet.
Yeah. But let's talk about the why here. Why
would China do this? What's their motivation?
So the article points to a couple of likely reasons.
The first is that there's been these ongoing
trade tensions between the U .S. and China for
a while now. Right. And this could be another
move in that larger game of economic chess. You
know, they're trying to exert some leverage.
Yeah, it's almost like a retaliatory kind of
thing. Yeah, potentially. And the second reason
is probably more directly tied to the beef market
itself. There are reports that China's actually
been dealing with an oversupply of beef domestically.
Oh, interesting. Yeah, apparently. Apparently,
Chinese beef producers were experiencing some
financial losses in 2024. And by limiting imports
specifically of beef, but not pork and poultry,
it seems like they're trying to protect their
own domestic beef industry from those price declines.
You know, they want to prop up their own producers.
So it's a strategic decision on their part, looking
out for their own internal market and maybe using
this as a bargaining chip in these broader trade
negotiations. Right. So you mentioned the phase
one trade deal. does this situation potentially
represent some sort of breach of that agreement.
Well, according to the USDA, China hasn't actually
responded to their repeated requests to renew
those plant registrations. And the phase one
trade deal specifically says that China should
update its list of approved plants within 20
days of getting updates from the USDA. So the
silence from them definitely raises some eyebrows.
You know, does it violate the terms of that agreement?
It sounds like it could. Yeah. And what's interesting
is that this isn't even the first time this has
happened. The article mentions that there were
84 U .S. plant registrations that lapsed back
in February of 2025. And while shipments from
those plants were initially still getting through
customs, it's not clear how long that's going
to last. So there's a pattern emerging here.
It's not just this sudden big batch of 390. Right.
It's a more gradual kind of erosion of these
approvals, which is even more concerning. Yeah,
definitely. So to really appreciate the scope
of this, let's kind of zoom out for a second
and look at the bigger picture of meat trade
between the U .S. and China. How big of a market
is this for American producers? So the article
gives us some helpful numbers. In 2024, the U
.S. was China's third largest meat supplier by
volume. They exported about 590 ,000 tons, which
is roughly 9 % of all the meat that China imported.
Wow, that's a sizable chunk. And in terms of
value, the U .S. was actually the second largest
supplier with exports totaling $2 .5 billion.
Wow. So those figures really illustrate how important
the Chinese market is for U .S. meat producers.
And that $4 .13 billion impact we talked about
earlier doesn't just include the direct loss
of those exports to China. It also factors in
the ripple effect that this could have on prices
in other markets. Oh, right. So like key export
markets for the U .S., like Japan, South Korea,
Taiwan. Okay. Those prices could also soften
because if China... this big buyer steps back
from the global market, overall demand decreases.
And that can push prices down even in places
where the U .S. can still sell their beef. So
it's not just losing those direct sales. It's
also the potential for a wider price drop in
a bunch of other important markets. Exactly.
And the article also highlights that certain
cuts of beef are going to be particularly vulnerable.
You know, the cuts that don't have as much demand
here in the U .S. Right. If they can't be exported
to China, where there might be more demand for
them, they essentially become a surplus here,
driving prices down even further. So for our
listeners who might be sweating a little bit
right now, thinking about how this might affect
them, what are some things they can do? What
are some proactive steps or strategies they can
consider? Yeah, so the article does outline a
few things. One thing producers could think about
is adjusting their culling schedules. So if they
have cows that are ready to be culled, You know,
maybe it makes sense to try and sell them sooner
rather than later before those prices potentially
drop even further. Get ahead of it. Right. But
on the other hand, if they can afford to keep
those less productive cows for a little bit longer,
they might want to delay culling and hope that
the situation with China improves. You know,
it's a gamble either way. Yeah, it's a tough
call. And another option is exploring alternative
marketing channels for their dairy beef. So maybe
looking into direct marketing to local processors.
or finding niche markets that might be a little
more stable and less reliant on these big export
markets. So thinking outside the box a little
bit. Exactly. And the article also mentioned
some specific risk management tools that are
available. Right. So one of those is the USDA's
Livestock Risk Protection, or LRP, insurance
program for cull cows. And this insurance can
actually cover a pretty significant portion of
the expected market value at the end of the insurance
period, like 70 % to 100%. Wow. pretty good.
Yeah. And the premiums for this coverage are
subsidized by the government. So it can be a
really helpful option for producers who are worried
about those price drops. That's good to know.
And for producers who are a little more experienced
with financial markets, you know, they might
want to consider using CME live cattle futures
contracts, specifically buying put options on
those contracts. This is a way to hedge against
potential declines in cattle prices. It's essentially
like buying insurance against a price decrease.
You know, You pay a premium for the option, but
it protects you from some of that downside risk.
So a range of options for producers, depending
on their comfort level and their experience.
Right. I think this situation really highlights,
you know, how vulnerable many dairy operations
have become. You know, they're really reliant
on strong coal cow values, especially when milk
prices are already struggling. Yeah, absolutely.
I mean for a lot of dairy farmers that income
from selling cull cows has become a major factor
in their profitability, particularly when milk
margins are tight. And this situation with China
is a perfect example of how easily that revenue
stream can be disrupted by things happening on
the global stage. You know, things that might
seem totally unrelated to what they're doing
on the farm. Yeah, it's a real wake up call.
Right. So to sum it all up for our listeners,
China's decision to essentially block these registrations
for U .S. beef plants has the potential to really
push down those cull cow prices. And this is
happening at a time when a lot of folks in the
dairy industry, are already dealing with those
shrinking profit margins on their milk. Right.
It's a perfect storm. And the key takeaway here
is that this situation is constantly evolving.
You know, how this plays out in the long run
depends on how these trade relationships change
how the market reacts. There's so many interconnected
pieces at play. Yeah, it's a complex issue. It
is. And as you're listening to all of this and
kind of digesting it, I want you to think about
this. You know, what other global events, things
that might not seem directly related to agriculture
at first glance could actually have a huge impact
on your operation? Right. You know, this situation
with beef and dairy is a perfect example of how
interconnected our world is, how something happening
on the other side of the globe can ripple all
the way back to your farm and affect your bottom
line. It really emphasizes the importance of
staying informed about what's going on in the
world, even things that seem unrelated to agriculture.
Yeah. Knowledge is power in this case. So stay
informed. Think about those connections and be
proactive about managing your risk in this ever
-changing global marketplace. Couldn't say better
myself. All right, folks, until next time. That
wraps up this week's episode of the Bullvine
Weekly Roundup. From community resilience to
market challenges, these stories remind us of
the complexities and opportunities in our industry.
Be sure to visit The Bullvine for more in -depth
coverage and resources. Until next time, stay
informed and stay strong.