Kris and I had the local MMPA meeting, and the big topic of discussion is … why is it bad, when is it going to get better?
We’re talking milk prices, and it all boils down to one main principle – supply and demand. We all know how it works! Supply is up, price is down, supply is down, price is up.
There are different reasons every time it happens, and every time we have to wait it out.
One reason we were talking about in the meeting is this: when Russia invaded the Ukraine, they had sanctions placed against them. Before that, they were purchasing a lot of dairy products. After that, they purchased none.
It’s interesting to think about. Everything that happens in this world has a direct effect on the rest of us. Putin’s choices have a DIRECT EFFECT on our milk check, which affects our farm purchases, which affects the local economy, which affects the tax base, which affects the schools, which means that my kids’ school is buying paper milk cartons because they’re cheaper and none of the kids like it, so thanks, Russia.
Another reason MMPA President Ken Nobis talked about is this: China was buying their factory workers lunch, which included dairy choices. Now the factories are not buying their workers lunch. Obviously, based on the number of people we’re dealing with, this makes a huge difference. (See? The reasons are varied and interesting!)
If we only had a domestic market, it’d be much more stable. However, there would also be not much chance for growth. We’re supplying the places that can’t support their dairy needs, too.
As a result, the co-ops have to find places for the milk to go. (At the meeting Ken referred to it as ‘sloppy milk.’) When the milk processing plants are full and there’s no one to purchase the milk, where does it go? It’s like a complicated game of Tetris, and sometimes we lose.
So, we wait it out, hoping for better times. In the meantime, we just keep doing what we’re doing. We milk cows, we take care of our farm, and we encourage the kids at school to drink out of milk cartons with a straw. It tastes way better that way, no matter where you live.
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