Market Reports

We are in the darkest days of this crisis. Consumers are hunkered down and demand has cratered. Processors are piling up product, milk is gushing, and the spring flush is likely to overwhelm the market for another two months.

The novel coronavirus has strangled foodservice and export channels, and the industry simply has more milk than it can handle. With so much lost demand, the dairy industry must cut production. The market is laboring ruthlessly to make that happen.

The retail surge has petered out. Consumers are still standing in the grocery checkout line with more dairy in their cart but the industry cannot make up for lost foodservice demand and throttled exports.

Those numbers clearly won’t pay the bills, and after four painful years (and a couple good months) dairy producers are in no shape to weather this storm.

Strong fluid milk consumption will benefit the whole industry by reducing dairy product output at a time when overall demand is likely taking a sizable hit.

Plunging stocks, cheap oil, and a strong dollar would normally spell disaster in the dairy markets. There was a lot of red ink on LaSalle Street but the damage was not nearly as extreme as feared.