In recent years, a variety of factors have led to a dramatic decline in the US dairy industry. This trend has prompted many American farmers to begin worrying about the industry’s future prospects. Some experts have begun to predict that the demand for dairy products in the US will only continue to fall. Yet despite these bleak forecasts, a growing body of evidence is suggesting that the dairy industry may, in fact, recover.
If you own a small farm, you probably have some concerns about the future of dairy farming in the US. In this article, we’ll walk you through some reasons why you should be optimistic. We’ll also outline how securing a ranch loan can help you to keep your operation secure in an uncertain future.
What Has Led to the Decline in the US Dairy Industry?
Dairy products like milk and cheese are not as popular in the United States as they once were. Today, a growing number of Americans are beginning to prefer dairy-alternatives (like almond and cashew milk). Of course, consumer trends are fickle, and the demand for non-dairy products could ultimately prove to be short-lived. For the time being, however, dairy products are simply not in vogue in many parts of the country.
The dairy industry has been further crippled by the ongoing trade war between the US and China. Prior to 2018, China was a major purchaser of US agricultural commodities, including dairy products. After the implementation of tariffs between the two countries, American dairy has been largely cut off from the Chinese market. Today, it’s estimated that American dairy exports to China have dropped by 50% as a result of the trade war.
Can We Expect the Dairy Industry to Recover?
The good news, however, is that there’s reason to be hopeful. Yes, the decline in US dairy sales has been steep in recent years. That said, experts predict that a few key developments could potentially rescue the industry from financial ruin.
For example, the USDA has introduced a program to aid farmers by purchasing $470 million worth of produce and dairy. The financial aid package is being launched in an effort to assist struggling farmers during the ongoing COVID-19 pandemic. In addition, milk prices are steadily climbing, which is providing some much-needed financial relief to thousands of US dairy farmers.
Given the uncertainty of our present moment, it’s difficult to say what the future holds for the dairy industry. What can be said definitively is that new challenges are sure to arise. In light of that, farmers should make it their main priority to protect their financial futures. With a farm and ranch loan, you can extend your budget and find an optimized repayment schedule for your business.
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Interested in learning more about how a farm and ranch loan can keep your farm financially secure? Contact our office today to speak with a loan expert!