Something Strange Is Happening With Dairy

追加: 2026-05-31

[00:00:00]Right now, there is more milk being produced in the United States than at almost any point in history.

[00:00:10]Milk production has increased month over month for 16 months. 16 consecutive months.

[00:00:17]Dairy herds are growing. Output per cow is rising. The United States is producing record volumes of dairy. So, that should all be good, right?

[00:00:29]At the same time, only 46% of dairy farmers expect to turn a profit a profit this year. 46%. That's down from 74% just a year ago.

[00:00:43]That is a 28 point collapse in one year, which is a little bit mindboggling. More than half of American dairy farmers are expecting to lose money in 2026, which makes you go, okay, how can both of these things happen at the same time?

[00:01:02]You know, we are producing record amounts of dairy, but more than half of the dairy farmers are losing money.

[00:01:12]And the the thing is, it's not just an agricultural story. It's a food security story, honestly. And it's a story that ends at your grocery store because it always does. Uh specifically at the butter, the cheese, the milk, and the yogurt that you put into your cart every single week. Today, we're going to walk through this and hopefully by the end of it, you will have a better grasp on what we can expect and uh how we're going to move forward. Hello everybody and welcome to Sutton's Days. If you're new here, my name is Lisa. We are all about pantry preparedness. And for the entire month of May and I think part of April, uh we have been discussing how our food uh chain is breaking and the things that are going to impact us the hardest. And this was kind of just the the last thing. And uh I know a few people have asked me about it. And so it just so happens that all of these reports kind of landed in my inbox and I started reading through them going, "What?" And yeah, it took a hot minute.

[00:02:18]So, it starts with uh the Farm Journal, which is what triggered today's video, honestly. Uh, the Farm Journal 2026 state of the dairy industry report was just released and it was compiled by uh Karen Bonner, the dairy editorial director at Farm Journal. In an interview published this week, she described the whole report as, and I quote, jarring. It was a reality check.

[00:02:48]The survey covered nearly 250 producers with herds exceeding 100 cows. These are working dairy farmers. Uh people who milk cows every single day, not analysts, not economists, you know, farmers, the actual people doing the work, putting the food into our grocery stores. And when Farm Journal asked them how they expected 2026 to to go financially, uh the answers painted what Dairy Herd management described as a gray skyline.

[00:03:23]And I think that's pretty mildly putting it, you know. So, we're going to walk through the data points and then we're going to walk through, you know, what we can expect. So, in 2025, 74% of dairy producers expected to see a profit. The actual result from that was only 61% did. Uh, so even the optimists were wrong. 13% of farmers who expected to be profitable ended up not being. For 2026 profit expectations, uh they have fallen to 46% and that's a 28% decline from what producers expected last year. It's also a 15 point drop even from the actual 2025 outcome. More than half of dairy farmers, 54% do not expect to make money this year. Karen Bonner told Farm Journal viewers this week, "I knew that things were financially tough for producers from coast to coast, but this report was truly eyeopening."

[00:04:26]When the editorial director who lives and breathes all dairy every single day says that it's truly eye opening, that's something that we need to pay attention to. Now again, uh the Farm Journal interview asked her uh directly, you know, dairy farmers cannot just wave a magic wand and make milk prices better.

[00:04:48]That's not the way it works. So how are they adjusting? and her answer reveals uh the depth of the squeeze that's going on. She said that input costs are the biggest challenge for producers from coast to coast. They are responding by pushing for higher component content in their milk. More butter fat, more protein per gallon. And if you've paid attention to anything, you know, in at the grocery store, those are some pretty big, you know, asks. Everything's got to have more protein anymore. Um and so theoretically they capture additional value and they have been succeeding at that. They've been doing very good. Milk production has increased month over month for 16 consecutive months. But then there's the brutal math that always happens because math ends up mathing.

[00:05:39]Producing more milk when milk prices are low does not solve the problem. It can make it worse. When every producer is trying to produce more to survive, the collective effect is over supply. We learned this in I want to say at least high school, if not before, you know, supply and demand. So if you've got over supply, it keeps the prices low, which means that every producer needs to produce even more to cover the costs.

[00:06:07]It's a trap. It's a vicious, horrible cycle. So the detail from the report that surprised me the most honestly uh despite a 28 point collapse in profit expectations 45% of producers still plan to expand in the next 5 years.

[00:06:28]You're losing money and you're going to expand in the next 5 years.

[00:06:34]Nearly half of farmers who are expected to lose money this year are still planning to grow their operations. Um the dairy herd management calls this the expansion paradox. Okay. They describe it as a strategy of resilience versus constraint. Producers who are not just adding cows but adding sites and leveraging smarter milk strategies to try to outmanage the storm.

[00:07:03]They are betting that if they can survive the short term, the long-term mission is worth it. So, what that tells me, and I think it's important honestly for you to understand, is that the people closest to the industry believe the pain is temporary and structural relief is coming, but there's still going to be pain. But first, they also believe that getting to that relief requires surv surviving a very difficult period. And honestly, not everyone would. So, how do you produce record amounts of milk and still lose money? Uh, I want to spend some time on the the central paradox here uh of the dairy situation because I think that understanding it changes how you think about what's going to happen to dairy prices at your store. The United States is producing more milk than at almost any point in its history. Okay, we started with that. um and the USDA forecast US milk production 1.2% higher in 2026.

[00:08:10]Globally, component adjusted milk production from major exporters, the US, European Union, uh New Zealand, Australia, and Argentina surged 4.5% year-over-year in the second half of 2025. The a proud publication noted that was the largest year-over-year increase in milk production since 2014.

[00:08:36]So why are farmers losing money? The answer is in two places. Milk prices and input costs. Yep. And right now both are moving in the wrong direction for farmers. Now, milk prices are set through a complex federal system involving class designations.

[00:08:57]Uh, class one for fluid milk, class two for soft products like yogurt and ice cream, class three for cheese and whey, and class 4 for butter and powder. Uh, the prices that farmers receive are set by these formulas and the market conditions. So, of course, the government is the one setting the prices. Okay. At the start of 2026, class 3 prices were $5.75 per 100 weight lower than the same month in 2025.

[00:09:30]Class 4 prices were $7.18 lower than a year prior. And those are enormous, enormous drops in an industry where margins are already very, very thin. The USDA's current all milk price forecast in for 2026 is $21.25 per 100 weight. That sounds like an improvement over some of 2025's lows.

[00:09:58]But the Bullvine Agricultural Analysis publication calculated that at that price, many 300 to 500 cow herds, the midsize family farms that have been the backbone of American dairy for literal generations, are staring at 100,000 to 300,000 in annual losses once you account for realistic labor and depreciation.

[00:10:24]$100 to $300,000 in annual losses on a family farm. Next, there's the input costs. So, at the same time that milk prices are dropping, input costs are rising. And this is where the convergence of everything else we have talked about this month becomes visible, you know, it's the same it's the same thing. Feed costs are the single largest input for a dairy farm.

[00:10:51]Single one. Typically 40 to 60% of total production costs are the feed costs. And while corn and soy prices have been relatively moderate in 2026 so far, the fertilizer crisis we talked about all month long uh is threatening to change that significantly.

[00:11:12]When fertilizer costs spike, corn and soybean production costs rise and feed prices follow within one to two growing seasons. Energy costs are the second major input. So first is feed, second is energy. Uh and we covered this earlier this month also. So natural gas elevated uh from the hormuse closure, right?

[00:11:35]Running a modern-day farm requires enormous amounts of energy. Cooling systems, milk parlors, feed delivery, refrigeration, transport. Uh every one of those energy costs have risen. Every single part of it. Now the third cost uh is the facility. The facility is the third largest cost for having a dairy farm. And uh Karen Bonner highlighted this specifically in the farm journal interview. Many farms are caught in a catch 22 where they need to upgrade aging facilities to remain competitive.

[00:12:12]Uh but the cost to do so has nearly doubled in the last 5 years.

[00:12:18]A farmer who knows their milking parlor needs upgrading is facing a capital investment decision at exactly the worst possible moment financially. The McKinley analysis of the dairy processor industry found that nearly 40% of US dairy processors have been forced to make strategic or operational changes switching suppliers, rationalizing product lines uh because of cost pressure. when the processors are feeling it, you know, the farms are feeling it much more acutely. So, here's one detail uh from the Farm Journal report that connects dairy to the beef story that we covered most of last month. Beef on dairy crossbreeding has become a significant profit source for dairy farmers. Dairy cows bred to beef bulls produce calves that go directly into beef production. And at today's beef prices, those calves are worth significantly more than a standard dairy calf. Bonner called it, you know, very lucrative because it's, you know, theoretically going to save their bacon a little bit. Um, but it's also adding an alternative profit source to the bottom line uh for struggling producers.

[00:13:37]So that's that's going to it's going to be helpful. But but okay, the US exported 269 million pounds of butter fat in 2025. That's what we ship out to other places, up 271% from the previous year. Much of that growth in the fat market is connected to the beef on dairy pipeline. More dairy cattle having beef cross calves means fewer dairy replacement heers which eventually tightens the dairy herd. So if they're not careful then it's going to deplete the dairy herd while it's trying to increase the beef herd. It's not going to be an immediate thing. not this year you know but the structural undercurrent is there if they don't get a grasp on it so much to understand the volatility in the dairy markets right now you need to understand something that you won't see in the news you're not going to uh dairy is not one market it is several overlapping markets fluid milk cheese butter yogurt powder whey and they move independently of each other based on different supply and dem demand dynamics. Thank you. Um right now those markets are all pulling in opposite directions big time. And the result is a level of price whiplash that even experienced dairy analysts are calling extraordinary. So when it comes to butter fat, you know, there can be too much of a good thing. Uh in recent years, dairy producers got very good at breeding cows for a high butter fat content. Consumers wanted more fat in their products. Uh the low-fat craze of the 1990s, you know, it reversed. Butter came back, thank God. Full fat dairy products became popular again. And the industry responded by producing more butter fat. The co-bank dairy analysis team, which is among the most respected in the agricultural industry, documented what happened next. The US exported an impressive 269 million pounds of butter fat and and an uh and an andh anhydra milk fat. Thank you. In 2025, a 271% increase from the previous year. 60% of those experts happened in the second half of the year. That's that's a lot.

[00:16:09]The export surge sounds positive. You would think it's a good thing, but Coobank described the underlying dynamic pretty clearly. The huge increase in domestic butter fat production created significant volatility in the class 3 cheese and whey markets and an even greater downturn in the class 4 butter and powder markets. In other words, the success in producing butter fat created over supply in some components and shortages in others at the same time. Ben Lane, who is a uh a senior dairy analyst at Terrain, uh who was featured in a in a recent video that prompted today's video, said that his quarter 2 2026 outlook for FS or FCS America that the market structure has shifted to short on protein, long on butter fat. industry overinvested in fat production and is now seeing the price consequences.

[00:17:18]So you guys have been you know you know all the food crazes that are going on right now with protein and highfat and you know all this other stuff and so by focusing on that high fat they shorted one category and they oversupplied another category. Neither thing is good.

[00:17:36]Now, the same time the butter and powder markets went soft from over supply, and mind you, I haven't seen that softening price. Have you? I haven't. Yeah. Um, protein markets tightened dramatically because consumers discovered protein.

[00:17:55]We're going to add extra protein to everything, right? High protein yogurts, guilty. Ultra filtered milks, guilty.

[00:18:02]protein milk concentrate, cottage cheese, guilty. Uh, and you know, the Bullvine publication noted was up 32% in consumption in 2025 alone because we all want extra protein. The demand for high protein dairy products has been growing at a rate the industry did not fully anticipate. I mean, when we embrace something, we do it seriously.

[00:18:27]Strong protein demand is pulling more solids into high protein applications, leaving less surplus skim to be dried into non-fat dry milk.

[00:18:39]Whey, the protein byproduct of cheese making has benefited from the explosion in protein. When there is more demand for protein than the milk supply is positioned to provide, protein prices rise. So you have two things happening at the same time. Butter prices soft because of over supply. Protein prices firm because of under supply in a commodity market that prices by component uh that creates a very complex volatile difficult to predict pricing environment. I mean, when you've got one output that creates five different outputs that are all dependent on the one, that's that's just a hot mess. Okay? And then when we all change up everything, you know, I want high protein, I want high fat, I want this, I want that, and they're I mean, they're delivering.

[00:19:39]They're definitely I don't see the softening of prices, though. Price whiplash is a real thing. A farmer who was projecting $17 milk in August of last year is now looking at $14 to $15 milk. That is a $2 to $3 per hundred weight decline. This is where the math gets fun. On a,000 cow dairy producing 25,000 lbs of milk per day. That's a lot of milk. $2 per 100 weight is $500 per day. $15,000 per month, $180,000 per year.

[00:20:17]That's the math. I know that is the financial reality underneath a gray skyline, the Farm Journal report described.

[00:20:27]So the ad the the person's advice to dairy farmers in his quarter 2 uh outlook risk should continue to be taken off the table through the year whenever price presents favorable opportunities.

[00:20:42]That's you know that's the hedge recommendation. He's telling farmers to lock in prices whenever they can because the volatility means you cannot predict where prices will be in six months. I have said it all month long. Farmers are the biggest gamblers on the planet. Now, I'm going to take a a step back uh from, you know, the market mechanics of the whole thing because it can give you a headache and talk about uh the financial pressure for people uh who own and operate dairy farms because I think this is where the story becomes genuinely alarming from a food security perspective.

[00:21:24]Not for today. None of this today, but for tomorrow. The National Family Farm Coalition reported earlier this year that since 2017 alone, the United States has lost 40% of its dairy operations.

[00:21:40]40% in 9 years. That's astronomical.

[00:21:46]The Bullvine publication put an even longer perspective on it. 50% of US dairies have vanished since 2013.

[00:21:56]Half gone in 13 years. There are fewer dairy farms in America today than at any point since the industry became industrialized. And the ones that remain are getting larger. The National Family Farm Coalition noted that 60% of the US milk supply is now produced on farms with over 2500 cows. The Bullvine found that mega dairies now dominate 70% of the total milk output. The small and midsize family dairy farms, the kind that has been part of the American agriculture for over a century, is disappearing at a rate that most people outside of the dairy industry do not realize. I know locally around me, most of the family dairy farms, they shut down over a decade ago.

[00:22:55]They couldn't do it anymore.

[00:22:58]So why does this matter for your grocery store?

[00:23:01]That's why we're here. So I want you to sit with it. What happens when food production systems become highly concentrated in a small number of very large operations? Because we have seen it replicated throughout the country throughout the industry. Okay. In general, concentration creates efficiency. That is the thought and theoretically it is. Okay. Larger farms have lower per unit production costs.

[00:23:33]I get it. Better access to capital, more negotiating power with processors and retailers. And that's why consolidation has been happening for quite some time now. The economics favor it. That's why we've heard for well over a decade about certain large corporations squeezing out the family farmer. Okay.

[00:23:57]Concentration though also creates vulnerability, big vulnerability. When the milk supply of a region or even an entire country is concentrated in a smaller number of very large operations, a single disease outbreak, a drought, a labor disruption, or a financial crisis at one of those operations has a much much larger impact than when the same volume of milk was spread across hundreds of smaller farms.

[00:24:30]Now, the Bullvine analysis identified a uh a specific a specific vulnerability that I think deserves attention. About 51% of dairy farm workers nationwide are immigrants.

[00:24:45]Farms employing immigrant labor account for roughly 80% of US milk production.

[00:24:50]Texas&M modeling found that a complete loss of immigrant labor could mean retail milk prices potentially doubling to around $6.40 a gallon. I'm not predicting the outcome here. I have no idea. I mean, right now everything's a crapshoot. I'm telling you that the dependency is real and documented and that the food system this concentrated around a specific labor source is more fragile than one that isn't. Here's where the story takes an interesting turn. Processors, the companies that buy milk from farmers and turn it into cheese or butter or yogurt or powder, have been investing heavily in new capacity.

[00:25:36]The Bullvine documented that processors have poured about 1.6 billion with a B dollars into new cheese plants in Texas, Kansas, and the I29 corridor in recent years.

[00:25:51]That is a significant infrastructure investment that is designed to absorb the growing milk supply and create more demand for dairy output. One of the pivots in the industry adding market uh volatility is shifting from not enough processing to all of a sudden some pretty heavy investments in processing capacity. That transition from scarcity to abundancy of processing creates volatility of course because milk flows change. Price relationships shift and the market has to find new equilibrium again. That's not a bad thing in the long run. You know, don't get me wrong.

[00:26:37]More processing capacity means more ability to manufacture the dairy products that the world wants.

[00:26:45]Notice we not just the country that the world wants. Okay? Especially cheese and protein products for export markets. But the transition period creates exactly the kind of volatility that is making farmers struggle to protect to protect their profitability. What does this mean in your grocery cart? So, I want to be as transparent as I can here with you.

[00:27:07]Uh because this is where the dairy story is actually different from the beef, the wheat, and the the produce stories that I've told you this month. The USDA's current forecast for dairy prices in 2026 is actually modestly positive uh for consumers. You know, the USDA ERS food price outlook predicts dairy prices will decrease approximately 0.9% in 2026. Not a huge drop, but it's a decrease. You know why? Because of exactly what I described at the very beginning. record milk production, over supply in some components, global milk output at its highest since 2014. When supply outpaces demand, prices come down. And right now in 2026, dairy is supplying very strong. So here's the honest picture for your grocery store right now. Butter, milk, and cheese are not going to spike this year. And I'm really happy about that, okay? Because we like cheese. My husband likes milk. butter. Hello, butter. Um, it's not going to do it, you know, in the way that coffee or tomatoes or, you know, beef or anything else are going a little bit crazy. The over supply situation is actually creating some downward price pressure that benefits consumers in the short term. Short term, my friends. So, if you're watching this video and wondering whether or not to, you know, rush out and buy 3 months worth of cheese right now, the answer is based on current conditions is no, don't. You don't have to. That's not where you need to spend your money. The urgency with dairy is not today. The urgency is in the structural story that is building underneath these current prices. So, a product byproduct breakdown just to help you kind of plan it, put it in your notes, you know, as we move forward. Butter prices have been volatile. Okay. But currently they're in the $1.75 to $2 a pound range according to Coobank. Coobank doesn't shop where I do. I'm at three bucks a pound. That is lower than recent peaks. We all know it got up there quite a bit. The over supply of butter fat is the primary driver for that. The US has been exporting butter aggressively to clear domestic inventory. So any place that we can send it, we're trying to send it.

[00:29:36]the forward concern with butter. If export markets slow down and tariff tensions with, you know, major buying countries uh could slow them, that exported excess supply comes back to the domestic market and prices could drop even further. For consumers, lower butter prices, you know, are always welcome cuz butter is good. Okay, for the farmers producing it, a further price drop could be devastating. Now cheese because you know I firmly believe that cheese makes life worth living. Um it has been the relatively bright spot in uh dairy markets. The strong demand uh domestically and solid exports have kept cheese prices more stable than butter which is good. uh the class 3 price which reflects cheese and wave value uh held better than class 4 through most of 2025 and 2026. The concern for fall and winter tariffs on US cheese exports. The US has been sending growing volumes of cheese to international markets. If regulatory tariffs from trading partners slow those exports down, that cheese comes back into domestic inventory and prices soften again and then margin pressure on farmers intensifies even further. Now, we're going to talk about milk cuz it does a body good. Milk production is rising. I mean, there's just no two ways about it. More supply means downward pressure on milk prices at the farm level. At retail, milk prices have been relatively stable because the fluid milk market is more locally supplied uh than commodity markets for butter and cheese.

[00:31:23]But the general trend of oversupplying does not support price increases. So then yogurt, this is where the protein story intersects with the consumers. High protein yogurt has been one of the fastest growing dairy categories.

[00:31:41]High protein yogurt. Guilty. Cottage cheese up 32% in 2025. Guilty. Demand for proteinrich dairy products is strong and is continuing to grow. That demand is supporting prices in this segment more than in fluid milk or butter. Now, the long-term consumer concern that I think we need to watch is what farm loss means to us because it will mean something to us and it will mean something significant to us. So, here's the forward-looking piece that I think matters the most for how you think about dairy preparedness. When farms disappear and 40% of dairy operations have disappeared just since 2017, the milk supply becomes more concentrated and more vulnerable to disruption of various sorts. The processing plants that survive and grow are increasingly large.

[00:32:44]They are trying to make it just like the meats where there's just a handful of places that any of these are processed.

[00:32:52]They are becoming increasingly specialized and increasingly dependent on specific labor and energy supply chains. A food system with 50 large dairy processors serving the entire country is more efficient than one with 5,000 small ones. It's also more fragile.

[00:33:14]One disease outbreak in a mega dairy. I can't even imagine.

[00:33:19]One labor disruption at a large processing plant, one regional drought that hits a you know concentration of large farms. These events which would have been absorbed uh across diverse systems of thousands of farms can now cause meaningful supply disruptions. I'm not predicting any of those though. So I am saying that none of them are far-fetched. I'm describing uh the structural vulnerability and the consolidation trend that you know is being created.

[00:33:57]It's it's already been proven in other industries and now they are creating it in the dairy industry. a vulnerability that will continue to grow as consolidation continues over the next decade because you know they're going to do it. So, we're going to look forward now. Okay, we know the who, the what, the why, the how, all of that fun stuff.

[00:34:19]This is something that I think could change everything. Um, I've told you that the current dairy prices are actually relatively stable all things considered or declining for consumers. I want to walk you through the scenario that changes that because it's not impossible and I think that you should understand it. I really do. Everything in dairy right now depends on two things remaining stable. Export markets and domestic over supply. If either of those changes, the picture shifts very quickly. The export market risk. Now, U the US dairy industry has become increasingly dependent on export markets to clear its growing milk supply. Dairy exports grew 3.8% yearover-year in 2025 on a total solid basis. If tariffs from major trading partners uh China, Southeast Asia, Mexico slow or stop those exports, the excess supply comes back into the domestic market.

[00:35:25]If that happens, it's going to be catastrophic for small farmers. It's going to be catastrophic for the industry. The paradox is that a price collapse that hurts farmers badly could actually lower your grocery store dairy prices further in the short term, but it accelerates farm loss, which reduces the production capacity available in future years. So, you may be getting a bargain today, but it's definitely going to increase tomorrow because less people are going to be making it. Now, fertilizer and feed cost risks because those are real, too. We talked about the fertilizer crisis, you know, all this month. 70% of farmers can't afford full fertilizer for this growing season. Um, and higher feed costs hit dairy margins from the input side. Exactly. When milk prices are already under pressure from over supply, the lag here is 6 to 18 months. That's what to watch. That's what to mark on your calendar. Okay. The underfertilized corn being grown right now becomes this fall's harvest crop, which becomes next winter and spring's feed supply. Feed cost increases from spring 2026 fertilizer crisis will hit dairy farmers most acutely in late 2026 and into 2027. So that's what you want to keep an eye on. You you don't want to forget that that's coming down the pike.

[00:36:55]Now the energy cost risk. Dairy farming is energyintensive running milking parlors, cooling systems, processing equipment. Uh it requires a an extraordinary amount of electricity and diesel. With diesel up 46% and the energy situation still remarkably volatile, every month the current energy price environment continues is another month of input cost pressure on dairy producers.

[00:37:25]So, the fall 2026 dairy picture.

[00:37:29]So, here's my honest assessment of where dairy prices are likely to be by fall and what we need to be paying attention to for fluid milk and cheese at the consumer level at our level. Okay, it's going to be relatively stable through summer with some potential for some very modest movement upward uh in the fall as the feed cost pressures, you know, work their way into the system. So, that's something to watch out there. For butter in the short term, we have an over supply and that's kept the butter prices, you know, relatively affordable.

[00:38:05]Could they be more affordable? Well, yes, they could. But um if if export uh markets remain strong then you know we're okay. But if the export markets do not remain strong then that butter does not get exported and it saturates our market which drives prices down and we're going to be losing farms plain and simple. Now for specialty dairies, we have artisan cheese, organic dairy, small farm products. This is where the consolidation story hits the hardest because again, it's different. As small farms disappear, the specialty and artisan dairy products that they produce become scarcer. It's just what happens.

[00:38:54]Premium dairy products will see more price pressure and availability issues.

[00:38:59]then commodity dairy because they're special but there's less people making it now. You know the 2027 and beyond concern is what we need to watch. The scenario that concerns dairy economists the most is not this year. It's not 2026. It's 2027 and 2028. If the fertilizer cris crisis reduces corn yields this fall, which we're anticipating, uh, feed costs rise early in 2027. If that coincides with a period of lower milk prices, which is possible given the over supply environment, you get a cost price squeeze that forces a new round of farm exits. Like, peace out, can't afford to do it, not taking a hit anymore. you know, more farms begin to disappear, the supply base is shrinking, and eventually the market that had too much milk finds itself without enough. That transformation from over supply to under supply in agricultural markets is called a commodity cycle.

[00:40:10]It happens in beef. We're living through it now with the smallest herd since 1951.

[00:40:16]Um it's happened in dairy before so it's not unusual you know and when it happens prices do not raise rise gradually they jump they like leaprog okay and we've seen that we've seen that with you know our beef prices so um Ben Lane at Terrain put the current market in exactly this context when he said there are quote a lot of changes going on in the industry that make get a really dynamic market right now, but also adds some volatility." End quote. Dynamic and volatile. That's an honest description.

[00:40:57]Crisis. No, no crisis today. You know, structural stress that creates crisis risk tomorrow.

[00:41:06]So, what should you do in your dairy preparedness action plan? Do you have one of those? You do now, my friends.

[00:41:13]Okay, I'm here for you. I mean, we all love dairy, okay? And so, it's one of those things that, you know, if you're far enough into the game, you are going to consider ways to make it possible for yourself. Dairy preparedness is different from beef or wheat. And I want to be super straight up and honest about that. I need you to understand that, okay? Beef is a buy now because structural shortage is real and prices will be higher in a year. period. That's clear. You know, it's it's an urgent case. Wheat is, you know, buy your wheat now. And because the harvest with wheat, it's a matter of buying your wheat now because the harvest shortfall is confirmed and prices are going to rise.

[00:42:02]So again, we're given that unprecedented window of warning to get our ducks in a row and get prepared. Dairy, however, that's a whole different thing that it's it's a it's a it's more nuanced. That's what we'll call it. More nuanced. Okay.

[00:42:20]Current dairy prices are relatively stable or declining. The risk is not acute today. It's structural and it's building. Your dairy preparedness actions are about building the habits and infrastructure for when that transition happens, not about panic buying dairy products this weekend.

[00:42:40]That's not what you should be doing.

[00:42:43]Now, with that framing, here's what I am actually recommending for you. Okay, butter. Butter is one dairy product to buy in depth right now. Those of you that know me know that I have a rather large stash of butter. Okay, butter is the one exception of my no urgency today framing. And here's why. Butter stores exceptionally well. Very well.

[00:43:07]Commercially produced salted butter in its original packaging. Frozen, lasts at least 12 months. Um, I've seen it go much farther. Okay, much farther. Uh, just make sure that you're not storing onions or peppers or anything in the freezer next to it. unsalted butter uh has a slightly shorter freezer life, they're saying, but honestly, I haven't run into that either. Butter is literally uh a cooking essential for most households. And butter prices, while volatile, you know, are in a relatively affordable range compared to where they have been and where I expect that they'll be going. If you are a household that bakes, cooks with butter regularly, or uses butter as a primary fat, buying two to three months worth of butter and freezing it right now is extremely practical. Uh, low urgency but sensible action. Highly recommended.

[00:44:10]Highly recommended. Okay. Real butter.

[00:44:13]You're not preparing for a crisis.

[00:44:15]you're buying uh a stable, storeable product at today's prices before the supply situation works itself out in a direction that might not be favorable.

[00:44:27]We won't know until we know. We we won't because there are just so many balls up in the air that we're going to have to wait to see what actually comes crashing down and what happens. But you're never going to go wrong by buying 2 to 3 months worth of butter and storing it in your freezer. You're never going to go wrong unless you store onions or peppers on top of it. Now, when it comes to hard cheese, um hard cheeses store well and are highly versatile. Parmesan, uh Romano, a cheddar. These cheeses can be vacuum sealed with your, you know, wee if you've got one. I've got a wee. I love it. um your vac, you know, your chamber vac and stored for months in the refrigerator or frozen for, you know, a year or more with minimal quality loss.

[00:45:15]Now, are they going to be slicable? No, they're going to crumble. They're just, you know, of course they're going to crumble. So, this is not an urgent panic preparation. It's a sensible building of a pantry that includes dairy if it's stuff that you use. Uh a wheel of Parmesan cheese. Gosh, when's the last time you saw a wheel vacuum sealed and refrigerated? A block of sharp cheddar cheese in the freezer. These are practical additions to a well-rounded food storage pantry because cheese is life, you know. Now, powdered dairy. I have always recommended powdered dairy.

[00:45:50]I will always recommend powdered dairy.

[00:45:52]I do recommend that if you're going to store it that you store the uh low-fat, no fat powdered dairy, but powdered whole milk, powdered buttermilk, dried cheese powder. These are the dairy products that live uh in a you know a medium, I wouldn't say long-term, but a medium-term pantry. Powdered whole milk sealed with an oxygen absorber. that that's normally good for a year to two depending again totally dependent on you, your storage conditions, everything else. Airtight, you know, dark, cool, dry, the whole thing. I highly recommend non-fat. Yes, you can do more with whole fat, but I recommend non-fat.

[00:46:38]So, um, as a pantry stable, it literally gives you dairy utility without refrigeration and it's genuinely valuable. Just as a side note, okay, Thrivalist has uh dairy and it's in a number 10 can and it is shelf stable for a very long time and it's a good price.

[00:47:03]So, if it's something that you want to stock up on, get a few cans to throw on the shelf in case of an emergency. I have this stuff all over the place. Um, and I use it a lot when I'm baking because I'm not going to go out and buy extra milk. I'll just use that. It works great. It's great to have around for that kind of thing, especially if you're working out of your pantry and you don't want to spend any money.

[00:47:26]If you want to check out Thrivalist, uh, you can go to thestackedpantry.com and click on the Thrivalist picture and you will see my name on the top of the website for Thrivalist. The milk is on sale this month and we've got a couple days left of this month just in case.

[00:47:44]Now, uh, this is a great time to stock up on this kind of stuff while the prices are still good. So, the final dairy action that I'm going to ask you know or recommend is to know your local sources if you can.

[00:48:02]And this is a preparedness action that actually doesn't cost you any money today, but is worth 10 times its weight.

[00:48:09]Find out where your local dairy products come from. Find out where they come from. Do you have a local dairy farm, a regional crearyy, or a farm stand that sells dairy products near you? Do you know which brands at your grocery store are produced regionally versus nationally? That's so important. I mean, seriously, Wally World can take a hit.

[00:48:33]You know, Mr. Smith and his farm cannot.

[00:48:37]So, let's give Mr. Smith our business.

[00:48:40]building a relationship with local and regional sources instead of, you know, the big national supplies.

[00:48:47]It it cuts down your supply chain disruptions and the possibility for them in a way that no amount of pantry stocking can replicate.

[00:48:58]Your relationships with the actual producers are better than gold. And local dairy is also where you can get the artisan and specialty products, you know, that you might be interested in, the products most at risk when consolidation eliminates them. So today I want to close with something that I hope captures why I spent nearly an hour, technically more on my end, um, on dairy. Okay, the dairy story is not a simple story. It's just not. It's not prices are going up, panic buy butter, you know, it's the reality is is so much more complex than that. Record production, financial collapse among producers, market volatility driven by component imbalances, aggressive consolidation eliminating half the farms in America, and a structural fragility that is building quietly underneath currently stable consumer prices. There's a lot going on in the dairy field. There really is. The complexity, that complexity is exactly why most people are not talking about it. It's too hard to talk about. Trust me, it's too hard to talk about. It doesn't fit a clean headline. You know, it requires understanding the difference between today's consumer price and tomorrow's structural vulnerability.

[00:50:21]It requires holding two things in your head at once. cheap butter right now and the disappearance of farms that make it.

[00:50:30]I mean, that's a lot to digest no matter who you are. And you've done that work today. So, congrats. You got it. Okay, you now know more than 99% of the people walking around. Seriously, you do.

[00:50:44]You watched, you know, nearly an hour of dairy e economics. I don't even want to talk about it again. But and and hopefully you have come out on the other side with a clearer picture of of what's happening so that maybe you can explain it to somebody who can explain it to somebody who can explain it to somebody.

[00:51:03]You know that knowledge is worth something. Use it. Store some butter.

[00:51:08]Seriously, store some butter. Okay? Uh vacuum seal some cheese. You will never go wrong with that. uh learn where your local dairy sources, your regional ones are too, and keep watching what's happening in this industry because it's important.

[00:51:23]But seriously, it's not just because cheese is life. It's because the transition that the analysts are tracking, the the one that I've been talking about from over supply to tightening, it's it's going to happen. It's absolutely going to happen.

[00:51:43]It always does. And when it does, the people who saw it coming will be glad they paid attention.

[00:51:51]So for my freeze dryers out there, or my wannabe freeze dryers, I'm still saying that pepper jack cheese from Azure is amazing. Um, and there are a lot of different cheeses that you can freeze dry and store.

[00:52:06]And freeze dryers are still on sale through the month of May. So, I hope you'll check out that link again at my atthest stackedpantry.com. Okay. Um, we need to pay attention to it. We need to be aware of it. We need to be that 1% of people that are ahead of what's coming because it's coming.

[00:52:31]There's no stopping it.

[00:52:33]Until next time, everybody, be safe.

[00:52:36]Keep stacking it to the rafters, my friends.