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Scientists believe that zebra stripes deter insects. To test this theory, researchers painted black…
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Tag: cows
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America’s Dairy Farms Have Vanished
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Does it become bottled milk? That’s Class 1 price. Yogurt? Class 2 price. Cheddar cheese? Class 3 price. Butter or powdered dry milk? Class 4. Traditionally, Class 1 receives the highest price.
Do you know where your milk comes from?Photograph: Sue Ogrocki/AP Photo
There are 11 FMMOs that divide up the country. The Florida, Southeast, and Appalachian FMMOs focus heavily on Class 1, or bottled, milk. The other FMMOs, such as Upper Midwest and Pacific Northwest, have more manufactured products such as cheese and butter.
For the past several decades, farmers have generally received the minimum price. Improvements in milk quality, milk production, transportation, refrigeration, and processing all led to greater quantities of milk, greater shelf life, and greater access to products across the US. Growing supply reduced competition among processing plants and reduced overall prices.
Along with these improvements in production came increased costs of production, such as cattle feed, farm labor, veterinary care, fuel, and equipment costs.
Researchers at the University of Tennessee in 2022 compared the price received for milk across regions against the primary costs of production: feed and labor. The results show why farms are struggling.
From 2005 to 2020, milk sales income per 100 pounds of milk produced ranged from $11.54 to $29.80, with an average price of $18.57. For that same period, the total costs to produce 100 pounds of milk ranged from $11.27 to $43.88, with an average cost of $25.80.
On average, that meant a single cow that produced 24,000 pounds of milk brought in about $4,457. Yet, it cost $6,192 to produce that milk, meaning a loss for the dairy farmer.
More efficient farms are able to reduce their costs of production by improving cow health, reproductive performance, and feed-to-milk conversion ratios. Larger farms or groups of farmers—cooperatives such as Dairy Farmers of America—may also be able to take advantage of forward contracting on grain and future milk prices. Investments in precision technologies such as robotic milking systems, rotary parlors, and wearable health and reproductive technologies can help reduce labor costs across farms.
Regardless of size, surviving in the dairy industry takes passion, dedication, and careful business management.
Some regions have had greater losses than others, which largely ties back to how farmers are paid, meaning the classes of milk, and the rising costs of production in their area. There are some insurance and hedging programs that can help farmers offset high costs of production or unexpected drops in price. If farmers take advantage of them, data shows they can functions as a safety net, but they don’t fix the underlying problem of costs exceeding income.
Passing the Torch to Future Farmers
Why do some dairy farmers still persist, despite low milk prices and high costs of production?
For many farmers, the answer is because it is a family business and a part of their heritage. Ninety-seven percent of US dairy farms are family owned and operated.
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Elizabeth Eckelkamp
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Bird flu Is bad for poultry and dairy cows. It’s not a dire threat for most of us — yet
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Headlines are flying after the Department of Agriculture confirmed that the H5N1 bird flu virus has infected dairy cows around the country. Tests have detected the virus among cattle in nine states, mainly in Texas and New Mexico, and most recently in Colorado, said Nirav Shah, principal deputy director at the Centers for Disease Control and Prevention, at a May 1 event held by the Council on Foreign Relations.
A menagerie of other animals have been infected by H5N1, and at least one person in Texas. But what scientists fear most is if the virus were to spread efficiently from person to person. That hasn’t happened and might not. Shah said the CDC considers the H5N1 outbreak “a low risk to the general public at this time.”
MORE: Maternal deaths are falling in the U.S., but racial disparities remain
Viruses evolve and outbreaks can shift quickly. “As with any major outbreak, this is moving at the speed of a bullet train,” Shah said. “What we’ll be talking about is a snapshot of that fast-moving train.” What he means is that what’s known about the H5N1 bird flu today will undoubtedly change.
With that in mind, here’s what you need to know now.
Who gets the bird flu?
Mainly birds. Over the past few years, however, the H5N1 bird flu virus has increasingly jumped from birds into mammals around the world. The growing list of more than 50 species includes seals, goats, skunks, cats and wild bush dogs at a zoo in the United Kingdom. At least 24,000 sea lions died in outbreaks of H5N1 bird flu in South America last year.
What makes the current outbreak in cattle unusual is that it’s spreading rapidly from cow to cow, whereas the other cases — except for the sea lion infections — appear limited. Researchers know this because genetic sequences of the H5N1 viruses drawn from cattle this year were nearly identical to one another.
The cattle outbreak is also concerning because the country has been caught off guard. Researchers examining the virus’s genomes suggest it originally spilled over from birds into cows late last year in Texas, and has since spread among many more cows than have been tested. “Our analyses show this has been circulating in cows for four months or so, under our noses,” said Michael Worobey, an evolutionary biologist at the University of Arizona in Tucson.
Is this the start of the next pandemic?
Not yet. But it’s a thought worth considering because a bird flu pandemic would be a nightmare. More than half of people infected by older strains of H5N1 bird flu viruses from 2003 to 2016 died. Even if death rates turn out to be less severe for the H5N1 strain currently circulating in cattle, repercussions could involve loads of sick people and hospitals too overwhelmed to handle other medical emergencies.
Although at least one person has been infected with H5N1 this year, the virus can’t lead to a pandemic in its current state. To achieve that horrible status, a pathogen needs to sicken many people on multiple continents. And to do that, the H5N1 virus would need to infect a ton of people. That won’t happen through occasional spillovers of the virus from farm animals into people. Rather, the virus must acquire mutations for it to spread from person to person, like the seasonal flu, as a respiratory infection transmitted largely through the air as people cough, sneeze and breathe. As we learned in the depths of COVID-19, airborne viruses are hard to stop.
That hasn’t happened yet. However, H5N1 viruses now have plenty of chances to evolve as they replicate within thousands of cows. Like all viruses, they mutate as they replicate, and mutations that improve the virus’s survival are passed to the next generation. And because cows are mammals, the viruses could be getting better at thriving within cells that are closer to ours than birds’.
The evolution of a pandemic-ready bird flu virus could be aided by a sort of superpower possessed by many viruses. Namely, they sometimes swap their genes with other strains in a process called reassortment. In a study published in 2009, Worobey and other researchers traced the origin of the H1N1 “swine flu” pandemic to events in which different viruses causing the swine flu, bird flu and human flu mixed and matched their genes within pigs that they were simultaneously infecting. Pigs need not be involved this time around, Worobey warned.
Will a pandemic start if a person drinks virus-contaminated milk?
Not yet. Cow’s milk, as well as powdered milk and infant formula, sold in stores is considered safe because the law requires all milk sold commercially to be pasteurized. That process of heating milk at high temperatures kills bacteria, viruses and other teeny organisms. Tests have identified fragments of H5N1 viruses in milk from grocery stores but confirm that the virus bits are dead and, therefore, harmless.
Unpasteurized “raw” milk, however, has been shown to contain living H5N1 viruses, which is why the FDA and other health authorities strongly advise people not to drink it. Doing so could cause a person to become seriously ill or worse. But even then, a pandemic is unlikely to be sparked because the virus — in its current form — does not spread efficiently from person to person, as the seasonal flu does.
What should be done?
A lot! Because of a lack of surveillance, the U.S. Department of Agriculture and other agencies have allowed the H5N1 bird flu to spread under the radar in cattle. To get a handle on the situation, the USDA recently ordered all lactating dairy cattle to be tested before farmers move them to other states, and the outcomes of the tests to be reported.
But just as restricting COVID tests to international travelers in early 2020 allowed the coronavirus to spread undetected, testing only cows that move across state lines would miss plenty of cases.
Such limited testing won’t reveal how the virus is spreading among cattle — information desperately needed so farmers can stop it. A leading hypothesis is that viruses are being transferred from one cow to the next through the machines used to milk them.
To boost testing, Fred Gingrich, executive director of a nonprofit organization for farm veterinarians, the American Association of Bovine Practitioners, said the government should offer funds to cattle farmers who report cases so that they have an incentive to test. Barring that, he said, reporting just adds reputational damage atop financial loss.
“These outbreaks have a significant economic impact,” Gingrich said. “Farmers lose about 20% of their milk production in an outbreak because animals quit eating, produce less milk, and some of that milk is abnormal and then can’t be sold.”
The government has made the H5N1 tests free for farmers, Gingrich added, but they haven’t budgeted money for veterinarians who must sample the cows, transport samples and file paperwork. “Tests are the least expensive part,” he said.
If testing on farms remains elusive, evolutionary virologists can still learn a lot by analyzing genomic sequences from H5N1 viruses sampled from cattle. The differences between sequences tell a story about where and when the current outbreak began, the path it travels, and whether the viruses are acquiring mutations that pose a threat to people. Yet this vital research has been hampered by the USDA’s slow and incomplete posting of genetic data, Worobey said.
The government should also help poultry farmers prevent H5N1 outbreaks since those kill many birds and pose a constant threat of spillover, said Maurice Pitesky, an avian disease specialist at the University of California-Davis.
Waterfowl like ducks and geese are the usual sources of outbreaks on poultry farms, and researchers can detect their proximity using remote sensing and other technologies. By zeroing in on zones of potential spillover, farmers can target their attention. That can mean routine surveillance to detect early signs of infections in poultry, using water cannons to shoo away migrating flocks, relocating farm animals or temporarily ushering them into barns. “We should be spending on prevention,” Pitesky said.
OK it’s not a pandemic, but what could happen to people who get this year’s H5N1 bird flu?
No one really knows. Only one person in Texas has been diagnosed with the disease this year, in April. This person worked closely with dairy cows, and had a mild case with an eye infection. The CDC found out about them because of its surveillance process. Clinics are supposed to alert state health departments when they diagnose farmworkers with the flu, using tests that detect influenza viruses, broadly. State health departments then confirm the test, and if it’s positive, they send a person’s sample to a CDC laboratory, where it is checked for the H5N1 virus, specifically. “Thus far we have received 23,” Shah said. “All but one of those was negative.”
State health department officials are also monitoring around 150 people, he said, who have spent time around cattle. They’re checking in with these farmworkers via phone calls, text messages or in-person visits to see if they develop symptoms. And if that happens, they’ll be tested.
Another way to assess farmworkers would be to check their blood for antibodies against the H5N1 bird flu virus; a positive result would indicate they might have been unknowingly infected. But Shah said health officials are not yet doing this work.
“The fact that we’re four months in and haven’t done this isn’t a good sign,” Worobey said. “I’m not super worried about a pandemic at the moment, but we should start acting like we don’t want it to happen.”
KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.
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Amy Maxmen, KFF Health News
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More cows are being tested and tracked for bird flu. Here’s what that means
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U.S. health and agriculture officials are ramping up testing and tracking of bird flu in dairy cows in an urgent effort to understand — and stop — the growing outbreak.So far, the risk to humans remains low, officials said, but scientists are wary that the virus could change to spread more easily among people.The virus, known as Type A H5N1, has been detected in nearly three dozen dairy herds in eight states. Inactive viral remnants have been found in grocery store milk. Tests also show the virus is spreading between cows, including those that don’t show symptoms, and between cows and birds, according to the U.S. Department of Agriculture.Starting Monday, hundreds of thousands of lactating dairy cows in the U.S. will have to be tested — with negative results — before they can be moved between states, under terms of a new federal order.Here’s what you need to know about the ongoing bird flu investigation:WHY IS THIS OUTBREAK SO UNUSUAL?This strain of what’s known as highly pathogenic avian influenza has been circulating in wild birds for decades. In recent years, it has been detected in scores of mammals around the world. Most have been wild animals, such as foxes and bears, that ate sick or dying birds. But it’s also appeared in farmed minks. It’s shown up in aquatic mammals, such as harbor seals and porpoises, too. The virus was even found in a polar bear in northern Alaska.The virus was discovered in ruminants — goats and then dairy cows — in the U.S. this spring, surprising many scientists who have studied it for years.“When we think of influenza A, cows are not typically in that conversation,” said Richard Webby, an influenza expert at St. Jude Children’s Research Hospital.Flu viruses are notorious for adapting to spread among new species, so detection in dairy cows raises concerns it could spread to people, Webby said.HOW LONG HAS BIRD FLU BEEN SPREADING IN COWS?Scientists confirmed the virus in cows in March after weeks of reports from dairy farms that the animals were falling ill. Symptoms included lethargy, sharply reduced milk supply and changes to the milk, which became thick and yellow.Finding remnants of the virus in milk on the market “suggests that this has been going on longer, and is more widespread, than we have previously recognized,” said Matthew Aliota, a veterinary medicine researcher at the University of Minnesota.Under pressure from scientists, USDA officials released new genetic data about the outbreak this week.The data omitted some information about when and where samples were collected, but showed that the virus likely was spread by birds to cattle late last year, said Michael Worobey, an evolutionary biologist with the University of Arizona.Since then, it has spread among cattle and among farms, likely through contact with physical objects such as workers’ shoes, trucks or milking machines, Worobey said.And then the cows spread the virus back to birds, he said.“The genetic evidence is as clear as could be,” Worobey said. “Birds that are sampled on these farms have viruses with clear mammalian adaptations.”WHAT DO SCIENTISTS SAY ABOUT EFFORTS TO TRACK THE OUTBREAK?Several experts said the USDA’s plans to require testing in cows are a good start.“We need to be able to do greater surveillance so that we know what’s going on,” said Thomas Friedrich, a virology professor at the University of Wisconsin’s veterinary school.Worobey said the ideal would be to screen every herd. Besides looking for active infections, agriculture officials also should be looking at whether cows have antibodies to the virus, indicating past infections, he said.”That is a really accessible and quick way to find out how widespread this is,” he said.More testing of workers exposed to infected animals is also crucial, experts said. Some farm owners and some individual workers have been reluctant to work with public health officials during the outbreak, experts have said.“Increased surveillance is essentially an early warning system,” Aliota said. “It helps to characterize the scope of the problem, but also to head off potentially adverse consequences.”HOW BIG A RISK DOES BIRD FLU POSE FOR PEOPLE?Scientists are working to analyze more samples of retail milk to confirm that pasteurization, or heat-treating, kills the H5N1 virus, said Dr. Don Prater, acting director of the FDA’s food safety center. Those results are expected soon.While the general public doesn’t need to worry about drinking pasteurized milk, experts said they should avoid raw or unpasteurized milk.Also, dairy farm workers should consider extra precautions, such as masking, hand washing and changing work clothes, Aliota said.So far, 23 people have been tested for the virus during the outbreak in dairy cows, with one person testing positive for a mild eye infection, CDC officials said. At least 44 people who were exposed to infected animals in the current outbreak are being monitored for symptoms.WHAT ARE SCIENTISTS’ CONCERNS FOR THE FUTURE?David O’Connor, a virology expert at the University of Wisconsin-Madison, likened recent bird flu developments to a tornado watch versus a warning.“There are some of the ingredients that would be necessary for there to be a threat, but we’re not there,” he said. As with a tornado watch, “you wouldn’t change anything about how you live your daily life, but you would maybe just have a bit of increased awareness that something is happening.”Worobey said this is the kind of outbreak “that we were hoping, after COVID, would not go unnoticed. But it has.”He said ambitious screening is needed “to detect things like this very quickly, and potentially nip them in the bud.”
U.S. health and agriculture officials are ramping up testing and tracking of bird flu in dairy cows in an urgent effort to understand — and stop — the growing outbreak.
So far, the risk to humans remains low, officials said, but scientists are wary that the virus could change to spread more easily among people.
The virus, known as Type A H5N1, has been detected in nearly three dozen dairy herds in eight states. Inactive viral remnants have been found in grocery store milk. Tests also show the virus is spreading between cows, including those that don’t show symptoms, and between cows and birds, according to the U.S. Department of Agriculture.
Starting Monday, hundreds of thousands of lactating dairy cows in the U.S. will have to be tested — with negative results — before they can be moved between states, under terms of a new federal order.
Here’s what you need to know about the ongoing bird flu investigation:
WHY IS THIS OUTBREAK SO UNUSUAL?
This strain of what’s known as highly pathogenic avian influenza has been circulating in wild birds for decades. In recent years, it has been detected in scores of mammals around the world. Most have been wild animals, such as foxes and bears, that ate sick or dying birds. But it’s also appeared in farmed minks. It’s shown up in aquatic mammals, such as harbor seals and porpoises, too. The virus was even found in a polar bear in northern Alaska.
The virus was discovered in ruminants — goats and then dairy cows — in the U.S. this spring, surprising many scientists who have studied it for years.
“When we think of influenza A, cows are not typically in that conversation,” said Richard Webby, an influenza expert at St. Jude Children’s Research Hospital.
Flu viruses are notorious for adapting to spread among new species, so detection in dairy cows raises concerns it could spread to people, Webby said.
HOW LONG HAS BIRD FLU BEEN SPREADING IN COWS?
Scientists confirmed the virus in cows in March after weeks of reports from dairy farms that the animals were falling ill. Symptoms included lethargy, sharply reduced milk supply and changes to the milk, which became thick and yellow.
Finding remnants of the virus in milk on the market “suggests that this has been going on longer, and is more widespread, than we have previously recognized,” said Matthew Aliota, a veterinary medicine researcher at the University of Minnesota.
Under pressure from scientists, USDA officials released new genetic data about the outbreak this week.
The data omitted some information about when and where samples were collected, but showed that the virus likely was spread by birds to cattle late last year, said Michael Worobey, an evolutionary biologist with the University of Arizona.
Since then, it has spread among cattle and among farms, likely through contact with physical objects such as workers’ shoes, trucks or milking machines, Worobey said.
And then the cows spread the virus back to birds, he said.
“The genetic evidence is as clear as could be,” Worobey said. “Birds that are sampled on these farms have viruses with clear mammalian adaptations.”
WHAT DO SCIENTISTS SAY ABOUT EFFORTS TO TRACK THE OUTBREAK?
Several experts said the USDA’s plans to require testing in cows are a good start.
“We need to be able to do greater surveillance so that we know what’s going on,” said Thomas Friedrich, a virology professor at the University of Wisconsin’s veterinary school.
Worobey said the ideal would be to screen every herd. Besides looking for active infections, agriculture officials also should be looking at whether cows have antibodies to the virus, indicating past infections, he said.
“That is a really accessible and quick way to find out how widespread this is,” he said.
More testing of workers exposed to infected animals is also crucial, experts said. Some farm owners and some individual workers have been reluctant to work with public health officials during the outbreak, experts have said.
“Increased surveillance is essentially an early warning system,” Aliota said. “It helps to characterize the scope of the problem, but also to head off potentially adverse consequences.”
HOW BIG A RISK DOES BIRD FLU POSE FOR PEOPLE?
Scientists are working to analyze more samples of retail milk to confirm that pasteurization, or heat-treating, kills the H5N1 virus, said Dr. Don Prater, acting director of the FDA’s food safety center. Those results are expected soon.
While the general public doesn’t need to worry about drinking pasteurized milk, experts said they should avoid raw or unpasteurized milk.
Also, dairy farm workers should consider extra precautions, such as masking, hand washing and changing work clothes, Aliota said.
So far, 23 people have been tested for the virus during the outbreak in dairy cows, with one person testing positive for a mild eye infection, CDC officials said. At least 44 people who were exposed to infected animals in the current outbreak are being monitored for symptoms.
WHAT ARE SCIENTISTS’ CONCERNS FOR THE FUTURE?
David O’Connor, a virology expert at the University of Wisconsin-Madison, likened recent bird flu developments to a tornado watch versus a warning.
“There are some of the ingredients that would be necessary for there to be a threat, but we’re not there,” he said. As with a tornado watch, “you wouldn’t change anything about how you live your daily life, but you would maybe just have a bit of increased awareness that something is happening.”
Worobey said this is the kind of outbreak “that we were hoping, after COVID, would not go unnoticed. But it has.”
He said ambitious screening is needed “to detect things like this very quickly, and potentially nip them in the bud.”
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‘Our sweetest little Valentine’: Calf with heart-shaped spot born at Oklahoma farm, named Cupid
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‘Our sweetest little Valentine’: Calf with heart-shaped spot born at Oklahoma farm, named Cupid
If you head out to Oklahoma’s Pottawatomie County, you’ll be able to find an adorable calf whose heart-shaped spot formed just in time for Valentine’s Day. Shortly after Christmas, a cow gave birth to a calf at Merchen Farms in Wanette, which is around 57 miles outside of Oklahoma City.The calf was born with a dot marking on its head. Last week, the farm’s owners noticed that the dot started taking the shape of a heart. “God is so fun. Can you see it?? He’s our sweetest little Valentine,” Merchen Farms said in a social media post.Merchen Farms told sister station KOCO that one of its Facebook followers had the privilege of naming the adorable calf Cupid just in time for Valentine’s Day. See Cupid in the video player above.
WANETTE, Okla. —If you head out to Oklahoma’s Pottawatomie County, you’ll be able to find an adorable calf whose heart-shaped spot formed just in time for Valentine’s Day.
Shortly after Christmas, a cow gave birth to a calf at Merchen Farms in Wanette, which is around 57 miles outside of Oklahoma City.
The calf was born with a dot marking on its head.
Last week, the farm’s owners noticed that the dot started taking the shape of a heart.
“God is so fun. Can you see it?? He’s our sweetest little Valentine,” Merchen Farms said in a social media post.
Merchen Farms told sister station KOCO that one of its Facebook followers had the privilege of naming the adorable calf Cupid just in time for Valentine’s Day.
See Cupid in the video player above.
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Inflation is easing, but the prices of these groceries are expected to soar in 2023 — including one whose price rose nearly 60% in December
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General inflation is easing, but the prices of some food items are not going down anytime soon. And the reasons are largely out of the Federal Reserve’s control.
The consumer price index cooled in December, falling to an annualized 6.5% from the 7.1% annual rate recorded in November, according to government data. Still, the annualized inflation rate in food was 10.4% in December, significantly higher than the overall inflation rate even as it represented a slower rate of increase than November, when food prices were 12% higher than in November 2021.
Inflation running at nearly 40-year highs over the past year has put a squeeze on American wallets. Through a series of jumbo rate hikes, the Federal Reserve has sought to tamp down inflation. Its target interest rate was lifted from a negligible level to a range of 4.25% to 4.50% by the end of 2022.
But a few factors impacting food prices are not going away. War is still ongoing in Ukraine, which affected the prices of fertilizers and animal feeds; the avian flu continues to impact the egg supply; and extreme weather conditions are adding complexities to food production.
The following is a look at how a few popular food items are affected.
Eggs
The price of eggs surged 59.9% on the year in December, up from 49% in November, according to the most government data. That means a carton of Grade A large eggs on average more than doubled in cost with prices reaching $4.25 in December 2022, compared to $1.79 a year earlier. In some parts of the country, consumers could pay up to $8 for a carton of organic eggs.
Avian flu, which has forced millions of chickens to be culled and caused a shortage of eggs, is the main reason behind the price increase. In a change from previous breakouts that faded as summer ended, this time the avian flu lingered into winter.
The holiday season is usually the peak for consumer egg demand, which means that we could see egg prices tick down a little in the new year, experts said.
But it will not be a significant drop given the ongoing flu and high cost of feed. If input costs continue to increase and the bird flu continues to kill large quantities of hens, the costs will most likely be passed on to consumers, said Curt Covington, senior director of partner relations at AgAmerica Lending, a financial services company providing agriculture loans.
Experts, including the biggest egg producer in the country, Cal-Maine, said the avian flu will be hitting egg supplies for the long term. “More than 43 million of the 58 million birds slaughtered over the past year to control the virus have been egg-laying chickens, including some farms with more than a million birds apiece in major egg-producing states like Iowa,” the Associated Press reported this week.
Read more: Cal-Maine says avian flu could continue to hit egg supplies after this year
“I suspect it will take much additional effort to ‘stamp-out’ HPAI this time around and we may very well be dealing with the reality that this will be a year-round issue,” said Brian Earnest, lead economist for animal protein at CoBank, a national cooperative bank serving industries across rural America, in an email to MarketWatch.
The weekly supplies of eggs on hand has also reached a historic low, he told MarketWatch. For the week ended Dec. 19, cases on hand reported by the USDA totaled 1.176 million. That’s a 20% drop year-over-year, and the lowest level for the same week since 2014, he said.
Also see: Why egg prices are sizzling — up 38% on last year
Butter
Butter prices rose by 31.4% on the year in December, up from 27% in November, making the average price for a pound of butter $4.81 nationally. It was $3.47 a year earlier.
Extreme heat and smaller cow herds are the main reasons behind that, experts told MarketWatch. Cows eat less and produce less milk in the heat, and the cost of maintaining milk production skyrocketed last year, making farmers unwilling to expand their herds.
Going forward into 2023, the price of butter could soften, but year-over-year price increases could still stay high, said Tanner Ehmke, lead economist of dairy and specialty crops at CoBank.
Cows are approaching their prime milk-producing season, which usually runs from March through May, although customer demand usually peaks during the recently completed holiday season, he said.
But the increase of supply will not be much, Ehmke said, because costs are staying at record highs for farmers to maintain and expand their herds. Drought in the Western part of the country and the war in Ukraine continue to impact the supply and costs of feed.
“It’s [going to be] a very modest increase,” said Ehmke.
About 58% of the U.S. is at least “abnormally dry,” according to the National Integrated Drought Information System. It’s likely this year will see more drought-inducing La Niña weather conditions, according to National Weather Service’s Climate Prediction Center.
“If so, the third dry year in a row would signal the worst drought since at least 2011- 2013,” said Rob Fox, director of CoBank’s knowledge-exchange division in a 2023 preview released in December. “But this time it is more concentrated in the Western states, and it would be even more devastating to their already precarious water supplies and desiccated pastures,” he added.
At the same time, butter production is competing with the growing production of and appetite for cheese in the U.S., Ehmke told MarketWatch last September. U.S. cheese consumption per capita is growing around 1% to 2% each year, according to the USDA. U.S. cheese exports also increased, particularly to countries like South Korea and Japan.
Read more: Butter prices hit an all-time high — partly because extreme heat is taking a toll on dairy cows
Vegetable oil and margarine
Margarine, which is largely made of vegetable oil, is also seeing a huge price increase. The price of margarine, the substitute for butter in the old days, rose by 43.8 % in December, down slightly from 47.4% in November compared to a year before.
While soybeans, corn and sunflower oil are among the food items that have been hugely impacted by the war in Ukraine, another dynamic is at play here, analysts suggested: A large quantity of vegetable oil is being used for the production of renewable diesel.
In 2021/2022, 38.4% of soybean-oil supplies were used for biofuel production — biofuel is a broader category than renewable diesel — up from 35.6% the year before, according to USDA data updated in October 2022.
Transitioning to a green economy laid out in the Inflation Reduction Act will require more soybean supply. The expected growth in soybean oil-based renewable diesel will require considerably more soybean bushels for domestic production, wrote Kenneth Scott Zuckerberg, CoBank’s lead economist for grain and farm supply, in a report in September.
At the moment, global grain and oilseed supplies are tight, and the combined global stocks of corn, wheat and soybeans are forecast to decline for the fifth straight year in 2023, according to the CoBank report.
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