Growing demand in China and drought conditions in New Zealand are helping drive up prices and appetites for cheese and other Idaho dairy products, according to reports and industry experts.
The surge in demand for Magic Valley dairy products better prices for producers is also getting a boost from the recent period of lackluster production in Europe.
Mark Lopshire, account manager for WOW Logistics, a company that warehouses cheese and other products in Jerome, said cheese prices have increased in recent months from $1.60 per pound to $1.85 per pound. Producers are also fetching higher prices on milk powder and other products, he said.
«Anybody in the cheese industry is just going, ‘Yoo-hoo!'» Lopshire told The Times-News in a story published Tuesday. «Milk has been depressed for the last couple of years.
«Six months ago, everybody was sitting on their cheese and their dry products were bursting at the seams,» he said. «Now it’s starting to pick up and we see product going out. Markets are changing, the price on whey, nonfat dried milk and cheese especially are going up.»
A U.S. Department of Agriculture report shows the influence China is having on the market conditions. According to the report, China’s import of milk powder increased from 100,000 metric tons in 2008 to more than 500,000 metric tons in 2012. The USDA predicts demand to surpass 600,000 metric tons by the end of the year.
At the same time, dairymen in New Zealand — one of the world’s leading milk producers — are coping with one of the worst droughts in decades, creating opportunity elsewhere, said Dave Kurzawski, a dairy analyst for FC Stone in Chicago.
«It was a confluence of events both weather related in New Zealand but also demand related for things like infant formula,» Kurzawski said. «European milk production was ho-hum at best. Really the U.S. became the balancing point for really the last six weeks and, frankly, I think it will be the case for the next few months.»
Despite the positive news, Idaho dairy producers have some ground to make up after several years of depressed milk prices, higher feed costs and lower profits.
«That’s the immediate concern with these guys,» Kurzawski said. «I don’t think that’s always going to be the case, but I think that’s been a real struggle for a lot of guys and I don’t think that’s over yet.»
Independent Milk Producers Manager Rick Naerebout of Twin Falls said despite what happens overseas, this year’s profits will depend on the success of corn farms. Naerebout said the Environmental Protection Agency‘s ethanol mandate has driven the price of corn to $7 per bushel, straining dairymen who rely on the crop to feed their cows.
Source: Â Oregon Live
