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2014 a big year for Wisconsin dairies – Audio

Mark Stephenson, Dairy Policy Analyst
Department of Agricultural and Applied Economics
UW-Madison College of Agricultural and Life Sciences
mwstephenson@wisc.edu
Phone (608) 890-3755

3:01 – Total Time
0:13 – 2014 a great year for dairy
0:44 – What made it a great year
1:13 – Exports key ingredient
1:58 – Export or bleed
2:19 – Dairy products to export
2:53 – Lead out

Sevie Kenyon: We’re visiting today with Mark Stephenson Department of Agricultural and Applied Economics University of Wisconsin – Madison in the College of Agricultural and Life Sciences and I’m Sevie Kenyon.

Mark, what kind of year did Wisconsin dairy farmers just have.

Mark Stephenson: Oh, let’s just be open and up front about it. I mean it was a terrific year. I think it might be one of those years of a generation you know where you look back at this and you say this was a really good year. We had the highest milk prices ever. We had feed prices that are much lower than they have been in the last several years. Between those lower feed prices and the highest milk prices dairy farmers just had a really good year.

Sevie Kenyon: What kinds of things came together to cause the year that we had?

Mark Stephenson: Well there were several things. Clearly we are being driven by our opportunities over seas. That’s where three quarters of the increased milk production that we’ve had is going. And last year some of our primary competitors like Oceana for example, just simply didn’t have the product that was needed and China was buying a lot of dairy product and we had a chance to sell to them.

Sevie Kenyon: Were there other factors at play during the year that caused the high prices?
Mark Stephenson: Yes there were for us in particular. You know the rest of the world, they’re pasture based, they’re seasonal calvers so they all calve at one time and they produce their milk shortly after calving or at least the largest volume and they didn’t have the dairy product that was needed at the time it was needed. We did have dairy product and we depleted our stocks pretty early. And then our flush season in the spring of the year here was not as big a flush as was anticipated so that gave us a chance to have dairy product prices in this country that were increasing at a time they were declining in the rest of the world.

Sevie Kenyon: Should Wisconsin dairy producers count on an export market?

Mark Stephenson: You know either we have to count on that or we have to lay down and bleed and trim milk production substantially in this country. By substantially, I mean maybe 12% of the milk production we have now would have to come off and just go away.

Sevie Kenyon: What dairy products are primarily entering the export market?

Mark Stephenson: We are most known for milk powders. That’s both whey powder which is a big seller for us and for skim milk powders. So those are the two primary products but increasingly we’ve had opportunities to sell cheese and butter into the markets. Those are products that we have to be a little bit more careful about. Our butter for example is usually 80% butterfat in this country and it’s 82% butterfat in the rest of the world so we have to make a different butter. We can’t just take stuff out of inventory and try to sell it to the rest of the world.

Sevie Kenyon: We’ve been visiting with Mark Stephenson Department of Agricultural and Applied Economics University of Wisconsin – Madison in the College of Agricultural and Life Sciences and I’m Sevie Kenyon.