Top Issues Faced by Organic Dairy Farmers
It’s common knowledge by this point that the dairy industry in the United States is now facing an economic crisis of unprecedented magnitude. In states like California, Pennsylvania, and Wisconsin – which for generations have been the booming epicenters of national dairy production – independent farming operations have been forced to file for bankruptcy at an alarming and rapidly accelerating rate.
As experts in ag farm credit, we’re being asked more and more about this issue. Farmers want to know, what are the causes of the modern dairy crisis? What are the greatest threats that U.S organic dairy farmers currently face? And most importantly, what can farmers do to protect their financial future? Let’s find out.
The Decline of the U.S Dairy Farm
Here are some of the factors that presently pose the greatest threat to the stability of the U.S organic dairy market:
- The U.S/China trade war. Since early 2018, the United States has been imposing increasingly stringent tariffs on imported goods from China, and Beijing has been retaliating in kind. Perhaps most notably, the Chinese government has dramatically cut back on its U.S-manufactured agricultural imports. This is a major blow to U.S dairy farmers, because China has historically been one of their primary export markets.
- Domestic overproduction. The average price of milk has been fluctuating wildly in recent years, but the general trend has been one of gradual decline. In an attempt to make up for the lost profits, independent farms around the country have desperately been producing and trying to sell greater quantities of milk. The effect has largely backfired, however, as overproduction has led to an even greater decrease in the value of milk.
- Falling demand. Organic dairy farmers are also being affected by the harsh realities of supply and demand. In the past, Americans had a fairly hearty appetite for dairy. Today, that’s being slowly but surely eclipsed by a growing demand for plant-based alternatives, such as almond milk and cashew milk.
What Does the Future Hold?
The three trends that have been outlined above can be expected to continue, at least into the immediately foreseeable future. The problems and their symptoms have been clearly identified. But for the time being it remains to be seen whether or not viable solutions will be found and implemented.
If you’re a dairy farmer that’s struggling to stay afloat, now may not be a bad time to look into refinancing. Refinancing your farm can help you gain access to capital you need to keep your farm running until the dairy issues are resolved.
Learn About Ag Farm Credit Today!
Securing agriculture farm credit can do a great deal to help farmers expand their existing business operations – it’s getting started that tends to be the hard part. Thankfully, MSF Agriculture has the solutions that you need. Contact our office today to learn more!