The global demand for agricultural products, including dairy products, will increase in coming years, meaning a bright outlook for that industry, speakers said at the Dairy Farmers of America Southwest Area Industry Update Meeting on Wednesday in Clovis.
Walter Bradley of the DFA Clovis office said 185 people from around the region attended. He estimated 70 percent were dairy farmers and the rest were invited guests.
DFA Southwest Area Council chairman Wayne Palla said the meeting’s purpose was to provide information on the direction of the dairy industry to DFA members and people in businesses connected to that industry so they could make educated decisions.
Bradley said the dairy industry isn’t out of bad economic times yet, but is working on it.
“We believe we’ve certainly hit bottom, and now we’re seeing the upswing begin,” he said.
A market in which demand decreased and supply didn’t caused low milk prices in the last months of 2008 and most of 2009. Coupled with high input costs, the low prices hurt dairy farmers.
In his speech, Robert Engel, president and CEO of banking cooperative CoBank, said the U.S. economy is growing, but the growth is anemic and facing many obstacles. Engel expects economic volatility and uncertainty to remain for years.
“Your industry must work together, now more than ever,” Engel said to the audience.
Also, he encouraged listeners to not lose sight of the promise global trends hold for the U.S. dairy and agriculture industries.
According to estimates, he said, by 2050, world food production will need to double to feed 9 billion people. However, Engel said only 10 percent more arable land can be put into production without serious environmental consequences.
Dairy is a good source of protein that developing nations will demand as they get more money and upgrade their diet, he continued.
Also, in his presentation, DFA President and CEO Rick Smith said foreign dairy products are in America, and U.S. dairy products are around the world.
“The best market in the world is this (American) market, and we don’t want to lose sight of that,” he said.
Smith said the U.S. market and demand for dairy products wouldn’t stay down forever, but the dairy industry didn’t want to miss growth around the world.
Palla said the most positive aspect of the meeting was Engel’s comments about agricultural products being exportable and competitive in the world market.
“I think agriculture’s got a bright future,” he said.
Palla also highlighted the National Milk Producers Federation’s “Foundation for the Future,” as explained by federation CEO Jerry Kozak. Foundation for the Future provides a blueprint for the dairy industry going into the 2012 farm bill negotiations.
Palla said the plan calls for the federal price support programs to be replaced with a catastrophic insurance program, for a dairy price stabilization system aimed at helping maintain a balance between supply and demand, and for revamping the way the federal government determines milk prices.