Will the Dairy Industry Recover in 2020?
The dairy industry has been through a tumultuous few years. For one thing, the onset of the trade war between the US and China has significantly hampered its growth. For another, the data indicates that consumers are increasingly starting to prefer dairy-free alternatives (such as almond milk). The result has been a massive overproduction of dairy products, driving the value of these commodities down even further.
If you’re a dairy farmer, you probably have a lot of questions about what the next year has in store. First and foremost: is the dairy industry on track to recover in the next year?
In this article, we’ll discuss the industry’s prospects for 2020, and how to finance land to keep it protected!
“Phase One” of the New Trade Deal: Reason for Hope?
The trade war that broke out between the US and China in 2018 dealt a blow to US agriculture. Prior to the conflict, China was one of the top buyers in the world of US-manufactured agricultural products – dairy included. After its onset, it’s estimated that US dairy exports to China fell by as much as 50%.
Then, in early 2020, President Trump signed “phase one” of a new trade deal with China. This agreement stipulates that China will spend $200 billion in US-manufactured agricultural products over the next two years. Needless to say, it’s inspired hope in the hearts of farmers across the country.
How Will the New Trade Deal Affect the US Dairy Industry?
In general, the new trade deal between the US and China has been met with enthusiasm by US dairy farmers. That enthusiasm, however, is tempered by the fact that there’s still a ways to go before the problem is solved.
As many dairy farmers have been quick to point out, the deal represents progress, but not a complete solution. There are still tariffs in place barring US manufacturer’s access to Chinese consumers. As a consequence, it’s highly unlikely that the dairy industry will return to its pre-2018 stature in the next year.
Learn More about How to Finance Your Land
In spite of these economic difficulties, there are still actions that farmers can take today to keep their property protected. Financing your land, for example, can make it much easier for you to make your monthly payments or invest in technological upgrades. If you’re interested in learning more about how to finance land, please give our office a call today!