Should dairy expansions happen near inputs or end-users?

An ag economist says he expects dairy production growth in more inland areas of the U.S. to be reevaluated as future export demand comes from Southeast Asia.

Tanner Ehmke with CoBank tells Brownfield increasing dairy production currently is largely connected to where there is feed and water.

“Where the cows are going is where you’ve got access to reliable feed, and where dairy producers can grow their own feed,” he says.

But domestic demand is limited which means a rise in exports needs to happen to support expanding herds and milk output according to Ehmke, who says where the end user is located is becoming of more importance for both production and processing.

“Do we want to be putting cows and processing facilities further inland, or do we want to be placing those assets closer to the coast?” he says.

The dairy herd was up 145,000 cows year-over-year in May and Ehmke says numbers aren’t likely to come down unless feed or expansion costs curtail output.  In the short-term, he says that will likely put downward pressure on futures in the months ahead.

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