Risks: payment schemes, deportation, tariffs, replacement heifers, bird flu

• The federal ‘Milk Marketing Order’ payment scheme for dairy producers is being reformed to improve ‘make allowances’ for dairy processors. However, it’s estimated that the proposed reform may cost farmers profits.
• President-Elect Trump’s plans for mass deportation of illegal migrant workers will cause dairy farmers to lose a key source of labour unless thousands of workers are rapidly made legal.
• A trade war is on the table between the US and Mexico/Canada, which is certain to disrupt the US dairy industry. If tariffs are placed on incoming goods, reciprocal tariffs are likely to be applied to dairy products and more.
• The shortage of replacement dairy heifers in herds across the nation is dire.
• Bird flu, or highly-pathogenic avian influenza, continues to affect the US dairy sector. In California, there are currently over 500 herds affected. On 18 December, California’s governor Gavin Newsom proclaimed a State of Emergency to accelerate expanding monitoring and to build on the coordinated state-wide approach to contain and mitigate the spread of the virus. Dairy farmers are advised to use mineral packages in their cows’ diets to help boost the immune system.

Opportunities: consumer demand, record trade, organic dairy