Milk prices dropped dramatically last month and dairy policy experts believe it could get worse if the virus continues to spread.
Mark Stephenson is the Director of Dairy Policy Analysis at the University of Wisconsin-Madison and his latest data shows the milk prices took a big hit on January 27 as the number of coronavirus cases increased across the globe.
“It dropped 70 cents per hundredweight of milk in one day, it’s declined further since that time period,” said Stephenson.
The decline comes after Stephenson said the dairy industry was slowing recovering from low prices over the last five years.
“If coronavirus puts a cap on that (markets).. We’re going to have another year of poor prices and that’s going to be devastating on farms that are very financially stressed right now,” said Stephenson.
The United States, New Zealand and the European Union are the largest milk producers — selling most of its products to China. Stephenson said if China stops importing as much as it used to because of the virus it will create an oversupply of product, pushing milk prices down even more.
“If all of those marketing chains are disrupted, then that means that those milk and dairy products in New Zealand or in Germany or France that would have been making their way to China are going to look for new customers, and they’ll compete for export sales with products from the U.S.”
Stephenson said it’s unclear how long it could take for milk prices to recover but fears if the virus becomes a pandemic it will become a “bigger problem” for farmers.
