Odd conditions reign over export, dairy, grain markets in the U.S.

Mark Stephenson, UW-Madison’s Director of Dairy Policy Analysis, noted that there are some “odd things” happening in the dairy, grain and export markets. Components from U.S. dairy farms, including butterfat, are high and climbing. “That’s not just because we have more colored cows. Farmers have gained an understanding of how to get more of those components from the cows they have.” The U.S. dairy industry has turned those higher butterfat levels into a lot more butter. Many dairy products produced in the United States are currently price-competitive for exportation, he added, including butter, powder (which is always price competitive) and whey. However, if we want to export U.S. butter it needs to be 82 percent fat and U.S. butter is made at 80 percent fat. Stephenson noted that it’s expensive to re-work the manufacturing process to change those 2 percentage points in the butter to make it suitable for export. Plants will do that only if they see that market conditions will ...