Press reports from around the world suggest milk surpluses are causing headaches in major milk producing countries.
Canada has been forced to dump more than 10 million lb. of skim milk in the past month, reports The Globe and Mail.
The problem has been “unprecedented demand for butter and cream, flat demand for fluid milk products and processing capacity stretched beyond its limits, say Dairy Farmers of Ontario officials. The problems are occurring in both Ontario and Quebec, Canada’s major dairy producing provinces.
The problem is compounded by imports of milk protein concentrates from the United States, which displaces domestic proteins in cheese, yogurt and other dairy products.
Dairy farmers in New Zealand could be facing losses of $500 per cow over the next year if current milk prices and payouts persist, reports NZFarmer.
The estimated losses come after accounting for farm expenses, interest payments and family living draws. Dairy advisors there are advising farmers to tighten budgets and alert their lenders to the potential losses.
In Ireland, European milk prices are approaching breakeven levels, reports Agriland.
For most Irish dairy farms, which rely heavily on grazing, the breakeven is about $13/cwt. But some farms, particularly those with smaller herds, start feeling financial pressure when milk prices dip to $14.50/cwt.
There is hope worldwide that China will re-enter the dairy market this fall. China has bought heavily in 2014, causing world prices to soar. When they backed away from the market in late 2014 and early 2015, markets nose dived.
In addition, a trade embargo by Russia of European, Australian and U.S. dairy imports has added extra pressure on world markets.