Dairy’s Margin Squeeze is Getting Tighter

A Dairy Herd Management article

Dairy futures prices have struggled to find much ground to stand on. Short term gains from heat waves or a spike in exports have done little to help the American dairy farmer. It is difficult to lock in profits or even manage risk with market inverses or flat futures prices as we look out into 2027. Locking in a profit is difficult, if not impossible today.

Outside factors such as declining beef cattle futures have caused a lot of concern, as for many, the extra income produced from calves sold has been the factor that allowed many producers to stay afloat. Here recently, feeder cattle prices have fallen nearly 30 cents per pound in the last three weeks and over 50 cents per pound in the last 60 days. While the beef cattle herd is not growing, the government is trying to help consumers at the grocery store by increasing imports.

Opening the border between the United States and Mexico, although slowly taking place one port at a time, it is still bringing cattle to the country. On top of that, President Trump announced a plan to ease tariff duties on ground beef getting imported into our country over the next 90 days with an impossibly high limit of 300,000 metric tons of beef possible to enter our country. While many argue that amount of imports is not feasible in such a short time, the impact is still concerning as the intention is to sell this beef at a discount of 25% lower than market value.

For the full article click here