Friday, March 19, 2021 CapitalPress.com 9 Dairy/Livestock Subscribe to our weekly dairy or livestock email newsletter at CapitalPress.com/newsletters Dairy picture clearer but volatility will continue National Milk backs labor reform legislation By CAROL RYAN DUMAS Capital Press By CAROL RYAN DUMAS Capital Press Tighter global milk sup- plies, growing economies, a slow return to familiar con- sumer patterns and reso- lution of shipping disrup- tions are all positive factors for dairy markets moving through the year. The view of the future for dairy markets is “clearer and more hopeful than it has been for months,” analysts at Rabobank said in their latest “Dairy Quarterly” report. Rabobank is forecast- ing a 1.1% increase in milk production in the Big 7 dairy-producing regions in 2021, a decrease compared to the 1.6% year-over-year growth in 2020. It’s also forecasting a 4.5% year- over-year increase in global GDP, compared to a 3.8% decrease in 2020. In the U.S., milk produc- tion increased 2.8% year over year in the fourth quar- ter of 2020 but slowed to a 1.6% increase in the fi rst quarter of 2021. The elevated milk sup- ply late last year might have jumped the gun as consumer activity remained relatively subdued over the winter, the analysts said. “But moving into the sec- ond half of 2021, we should see consumers shift into post-vaccine consumption patterns that boost demand,” they said. Higher feed costs will pressure producers’ margins, with corn and soybean prices remaining elevated at least until the new crop comes in September. “However, with risk-man- agement programs, govern- National Milk Produc- ers Federation is pushing hard to build bipartisan support for the Farm Work- force Modernization Act, which was reintroduced in the U.S. House. The bill passed the House in 2019 but was stopped cold in the Sen- ate by the COVID-19 pan- demic when non-pan- demic legislation was put to the side, Claudia Lar- son, National Milk’s senior director of govern- ment aff airs, said during the latest “Dairy Defi ned’ podcast. Circumstances are dif- ferent now than they were in 2019, with a couple of factors that could work in the bill’s favor, she said. “We are in the middle of COVID, and we have seen COVID actually exac- erbate the labor crisis that agriculture was already facing,” she said. There are fewer domes- tic workers available to be referred to farms, so the labor crisis has been inten- sifi ed, she said. “So it’s especially sig- nifi cant now because there does seem to be an increased sense of urgency and need to address the cri- sis on American farms,” she said. There is also a general sense of an appetite for immigration reform more Matthew Weaver/Capital Press File Analysts expect less volatility in dairy markets this year compared to 2020. MILK PRICE FORECAST Class III Q1 2021 — $16.08 Q2 2021 — $17.57 Q3 2021 — $17.70 Q4 2021 — $17.76 Q1 2022 — $17.09 Q1 2022 — $17.71 Class IV Q1 2021 — $13.64 Q2 2021 — $14.86 Q3 2021 — $15.71 Q4 2021 — $16.12 Q1 2022 — $16.08 Q1 2022 — $16.62 Source: Rabobank ment aid and relatively high milk prices in 2020, produc- ers are entering this year in a strong enough position to be able to withstand these pres- sures,” the analysts said. On the stocks side, cheese inventories were up 3.3% at the end of the year, which should be no challenge to work through. Butter inven- tories, however, remain 33% above a year ago. “As dairy production begins to refi ll the food- service supply chains, we expect less surplus milk to head to butter churns, result- ing in the eventual draw- down in butter stocks. Like- wise, a market surprise to the upside exists for the butterfat market if the timing of the recovery occurs during the seasonal low period (third quarter) of butterfat produc- tion,” the analysts said. Whey and nonfat dry milk have done well, but exports are currently challenged by container availability. But whey demand from China remains strong, and the ship- ping challenges should be resolved by the end of the second quarter, they said. U.S. dairy exports in 2020 were up 12% year over year, with strong increases to China, Indonesia and the Philippines — up 81%, 41% and 34%, respectively. “We can expect less dra- matic gains in 2021 against strong 2020 results, but trade should continue to be robust,” the analysts said. U.S. Capitol broadly. President Biden put forth his proposal, both the Senate and House have taken up immigration reform as something they want addressed in a serious and meaningful way and diff erent groups are more interested in reforming dif- ferent parts of the immigra- tion system, she said. “That general broader appetite for immigration reform wasn’t as, sort of, pervasive in 2019 as it is now,” she said. The reform that was passed in the House in 2019 was a bipartisan process with bipartisan support, and the current bill has the potential to be picked up and included in the broader immigration reform discus- sions, she said. “We have this potential for a bipartisan ag labor reform bill to move through the House, make it over to the Senate and really seize this window of opportu- nity that is being presented in the current reality of a broader appetite for immi- gration reform,” she said. The bill doesn’t have universal support in the agriculture community, but it does address dairy’s two broad, general needs — the protection of current work- ers and meaningful access to guest workers through the H-2A visa program, she said. “It is not a perfect bill, no piece of legislation is going to be perfect. But by addressing the needs in a way that would be work- able for dairy, it is a vehi- cle that we feel like we can support in moving it for- ward through the process so that additional improve- ments can be made,” she said. If the bill sits stag- nant, the industry loses the opportunity for continued discussions on fi nding an actual solution, she said. TWO GREAT SHOWS COMBINED! and MARCH 24 - 28, 2021 Portland Expo Center • Portland, Oregon WE’VE WORKED HARD TO BRING THESE SHOWS TO YOU AND WE ARE COMMITTED TO SAFETY. PLEASE HELP US SUCCEED. TICKETED TIMED ENTRY MANDATORY FACE PROTECTION MULTIPLE HAND SANITIZING STATIONS 6’ SOCIAL DISTANCING VIP EXPERIENCE! 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