Study: Dairy processors stretched by milk production gains
Recent lower milk prices have led to lower input costs for processors, strengthening balance sheets and opening the door to expansion opportunities.
Every year, U.S. dairy farmers produce 3 billion more pounds of milk than the year before. For the past few years, production growth has outpaced processing capacity growth, yet dairy processors are struggling to keep pace, according to “Dairy Processors Race to Keep Pace with Milk Production,” a new report from CoBank’s knowledge exchange division.
“Dairy processors are faced with the challenge of handling an ever-growing milk supply, while anticipating the right product mix to meet consumer demand,” says Ben Laine, senior dairy economist at CoBank, Greenwood Village, Colo. “An additional 27 billion pounds of U.S. milk processing capacity will be needed over the next 10 years if current trends persist.”