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Dairy economist says Coronavirus part of the recent price dip

A dairy economist says the recent roller coaster in the dairy markets was caused by a lack of direction, tightening of production, and even the Coronavirus scare. University of Wisconsin Center for Dairy Profitability Director Mark Stephenson says, “I think there’s concern about just how rapidly that may spread, and particularly with a major consumer of dairy products like China, so that gave us, in my opinion, that was what the seventy cent drop was in milk prices.”

Mark Stephenson

Stephenson tells Brownfield the Coronavirus news impacted many markets, and he’s certain markets will stabilize quickly. “This is perhaps an over-reaction to market information, but you know, the market is just kind of testing and trying to see what’s going on.”

Stephenson says the dairy herd declined slowly in 2019 but grew a bit near the end of the year. “I don’t think we’re going to see any major growth in that, but I don’t think we’ll see retraction either. If milk prices hold strong, dairy farmers are going to want to sell as much milk as they can to begin to restore some of their damaged balance sheets from the last few years of low prices.”

Stephenson spoke to Brownfield at the recent Ag Outlook Forum in Madison, Wisconsin.

UW Center for Dairy Profitability Director Mark Stephenson discusses dairy prices with Brownfield at the 2020 Ag Outlook Summit.

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