The Milk Check

T.C. Jacoby & Co. - Dairy Traders

Experienced dairy traders discuss current market trends that affect payments to dairy farmers.

  1. Oct 16

    Sacudida en el Mercado Lácteo: ¿Qué Está Pasando en México y EE. UU.?

    ¿Qué está provocando tanta volatilidad en el mercado lácteo de México y Estados Unidos? En este episodio en español de The Milk Check, los expertos de T.C. Jacoby & Co., Diego Carvallo, Yara Morales y Miguel Aragon, analizan los últimos movimientos del mercado lácteo, desde la disponibilidad de leche y las fluctuaciones de precios hasta los desafíos logísticos que están afectando a compradores y productores. Temas destacados de este episodio: Oferta de leche: ¿Cómo está evolucionando la producción en Estados Unidos y qué impacto podría tener una reducción de las compras de Liconsa en México? Mercado del queso: Después de una fuerte caída, los precios comienzan a recuperarse. Analizamos la creciente demanda de mozzarella, queso para reproceso y quesos destinados a Sudamérica. Leche descremada en polvo: Precios elevados, menor demanda y fuertes movimientos en los futuros. ¿Qué podemos esperar para los próximos meses? Logística y tipo de cambio: El aumento de los costos de transporte, la escasez de unidades y las fluctuaciones cambiarias están complicando las importaciones de productos lácteos. Mantequilla y proteínas lácteas: Exploramos la recuperación de la demanda de mantequilla, la corrección de precios del WPC80 y las oportunidades en el mercado de sueros y proteínas. ¿Hacia dónde se dirige el mercado lácteo? Acompáñanos para conocer las tendencias, los desafíos y las oportunidades que están transformando la industria en México, Estados Unidos y América Latina. ¡Suscríbete a The Milk Check! Mantente informado sobre los mercados lácteos internacionales con análisis y perspectivas de los expertos de T.C. Jacoby & Co. Visítanos: https://www.jacoby.com ¿Tienes preguntas? Nos encantaría escucharlas. Envíalas aquí abajo y podríamos responderlas en el programa. Pregúntale a The Milk Check Transcript: Diego Carvallo: [00:00:00] Buenas tardes a todos. Les saluda Diego Carvallo junto con Miguel Aragón y Yara Morales del equipo de T.C. Jacoby & Co. y les damos la bienvenida al pódcast de mediados de octubre del 2026. Hoy es día 13 de octubre con un mercado supermovido para todos los productos y inclusive para las monedas. Y pues vamos a ver esta conversación, que será muy interesante, a qué conclusiones llegamos. Miguel Aragón: Hola, Diego. Hola, Yara. Aquí estamos otra vez con algo de información de los mercados. Yara Morales: Sí. Hola, Diego. Hola, Miguel. Siempre un placer estar aquí con ustedes y compartiendo la información que podamos tener aquí para nuestros clientes y toda la audiencia que nos acompaña. Diego Carvallo: Amén. Bueno, para comenzar, creo que interesante que comencemos hablando como siempre de la parte de leche fluida de Estados Unidos, que, hay un mercado bastante interesante, bastante cambiante, una vez que pasamos la temporada de baja producción. Em, la información que recibimos de nuestro equipo de, fluida es que a medida que van mejorando las temperaturas en la zona del Midwest, en la zona de California, están comenzando a haber una estabilización y una pequeña mejora en los volúmenes y en los componentes de la leche. Sin embargo, todavía es muy temprano como para ver algo significativo o algo que llene las plantas, eh, de queso o de secado. Em, comenzamos a ver un poquito más de leche en la zona de Wisconsin y esperamos que durante los próximos meses, eh, ya estamos teniendo temperaturas de cincuenta, cincuenta y cinco grados, eh, durante el día y un poco más bajo en la zona de, de Chicago y del Midwest, lo cual equivale a temperaturas de menos de quince grados centígrados, em, va a comenzar a volver la leche. Em, entiendo en México la situación todavía sigue bastante ajustada. ¿Han, han escuchado algo en cuanto a la leche para México? Yara Morales: Sí, definitivamente es la temporada, la temporada que escasea bastante la leche es temporada de lluvias también. La verdad es que he escuchado que ha habido muy poca, muy poca leche fluida. Eh, aquí la situación es que el rumor que se está comentando es que Liconsa probablemente, eh, por cuestiones económicas, probablemente cancele algunos contratos o a lo mejor no los cancela todos, pero sí reducirá la compra de la leche fluida. Entonces habrá más, un poquito más de leche fluida en el mercado. Es producto de calidad que, que aunque sea de calidad, probablemente estará fluctuando entre, entre unos siete, ocho pesos por litro. Entonces eso, eso va a marcar un poquito la diferencia. Mhm. Diego Carvallo: Eso es muy interesante y lo vamos a hablar ahorita porque creemos que puede tener repercusión en, en varios de los productos Yara Morales: Sí, definitivamente ¿ Diego Carvallo: Les parece bien si comenzamos con quesos? Eeem, creo que es uno de los mercados más competitivos y más interesantes en este momento. ¿Cómo lo estás viendo, Miguel? ¿Qué ves, qué ves en la- Miguel Aragón: Definitivamente. Definitivamente hemos visto cómo el queso se llegó a, pues a desplomar, porque no hay otra palabra para decir lo que pasó. Pero en los últimos dos días hemos visto que al parecer tocó fondo y estamos en un rebote. La demanda doméstica en el queso ha sido muy débil, eh, en ciertos quesos, en los quesos semiduros. No así en el mozzarella. El mozzarella es otro mercado completamente. Eh, la demanda del mozzarella, de hecho, se, se intensificó. Hemos visto los reportes de el mercado de pizzas, que estuvo muy atrasado, digo, muy, muy, ah, mal el año pasado. Este año ha sido muy diferente. Entonces, ah, bueno, eh, eh, eso nos ha dejado con producción en el, en el mercado doméstico de, de quesos semiduros, eh, que se ha aprovechado para las exportaciones bastante, eh, los precios bajos. Las únicas dos cosas que nos están dañando es definitivamente el precio del transporte y el tipo de cambio, pero ha ayudado el precio del queso, aunque ahora, como les comento, ha rebotado. Eh, hemos visto varias cosas muy interesantes. En México, los quesos de línea número uno, al parecer están teniendo algo también de, de freno en la demanda, mientras que el queso de reproceso, el queso para reproceso, eh, se ha visto que la demanda se ha incrementado bastante en las últimas dos, tres semanas. Eh, muy interesante porque ese es el queso que es más para el mercado económico, eh, eh, ya que se utiliza como extensor para dar sabor, y hemos visto que la demanda se ha incrementado bastante. No en el caso de Suramérica. Ahí sí tenemos mucha demanda de quesos semiduros, quesos Colby, quesos Pepper [00:05:00] Jack, cheddar, cheddar amarillo. Eh, ahí, ahí sí la demanda sigue bastante. Y la demanda de queso crema para Suramérica sigue Bastante bien, aunque aquí el problema ha sido que tenemos problemas de producción dentro de plantas de Estados Unidos. Diego Carvallo: Miguel, esa demanda que estás viendo incremental a México para fortificación de queso, eh, ¿quiénes son los clientes que están comprando ese queso? ¿Son clientes finales, son procesadores, son fabricantes de queso? ¿Y cuál crees que es el producto que están sustituyendo? Miguel Aragón: Definitivamente son, como decimos acá, all of the above. Ve-vemos productores que están utilizando más queso para reproceso. Vemos distribuidores que le están vendiendo a productores que también están incrementando sus ventas o algunos que, aquí está la parte interesante, este, clientes de leche en polvo que están ahora incrementando su portafolio con queso para reproceso. Y creo que eso es, pues bastante interesante porque, al parecer ya sea que ven una oportunidad en el mercado o tal vez los precios de leche en polvo les han obligado a buscar alguna otra alternativa para sus clientes. Diego Carvallo: Bueno, es que si analizas los números y ves los costos, la verdad es que, eh, importar ese tipo de quesos hoy en día a México es, cuanto un 20, 30 % más económico que importar la leche descremada. Entonces, eh, es algo que yo creo que con el pasar del tiempo, si mantenemos los precios actuales, va a continuar ocurriendo. Miguel Aragón: Y aparte que tenemos las cantidades de queso que estamos produciendo, es a un producto que ya se está volviendo de portafolio, definitivamente. Correcto. Creo que lo vamos a tener constantemente. Diego Carvallo: Y pareciera que la tendencia en Estados Unidos es a continuar produciendo más quesos en los próximos años y menos leche descremada. Así que deberíamos mantenernos muy competitivos en quesos y no tan competitivos en lo que son, eh, la leche descremada. Así que muy interesante ver qué pasa en ese sentido en los próximos años. Así Miguel Aragón: es. Diego Carvallo: Haciendo un poquito el cambio, eh, Yara, cuéntanos qué estás viendo más bien del lado de, de los polvos, de la leche descremada, para Yara Morales: Bueno, la leche descremada, pues como todo mundo está medio, ah, sorprendido porque los precios están superaltos. Entonces, es por eso que Miguel estaba comentando lo de los quesos, porque eso, lo de los quesos apoya muchísimo los precios. En lugar de estar pagando una mano de obra, pues obviamente les interesa estar comprando los quesos. Entonces, los clientes sí han comentado que la venta de las, de los ingredientes, de, que es la leche descremada en polvo en este caso, pues sí, sí ha bajado. De hecho, los registros de las importaciones, ahí lo podemos ver, el año pasado, pues casi todos los meses estábamos importando treinta mil toneladas. Sí, en este año, pues se ve diferente, ¿no? Se ven mil, dos mil, hasta tres mil toneladas menos que el año pasado. Son buenos números, de cualquier manera se va la leche descremada, porque obviamente no hay leche fresca suficiente para todo el consumo y para toda la producción. Pero realmente, este, sí ha bajado y ha bajado el consumo, se ve lento, se siente lento. Y con estos precios, con mayor razón, ¿no? Con unos prec

  2. Sep 23

    We Have a Cheese Problem

    With more cheese competing for buyers around the world, could the global market be headed for a price war? U.S. cheese plants are running full, whey protein demand is supporting production and exports have been strong. But at home, cheese demand remains soft. That puts more pressure on exports to keep product moving. In episode 106 of The Milk Check, host Ted Jacoby III sits down with the T.C. Jacoby & Co. cheese team to discuss what happens when growing U.S. production meets intensifying competition overseas. In this episode, we cover: Why international buyers are asking for more cheese varieties, and where that could create opportunities for U.S. suppliers How freight costs and the strength of the U.S. dollar could make American cheese less competitive overseas What happens when stronger milk production in New Zealand and continued competition from Europe could puts pressure on global cheese prices Listen to The Milk Check episode 106, “We Have a Cheese Problem,” for the T.C. Jacoby & Co. team’s take on what could be ahead for the global cheese market. Got questions? We’d love to hear them. Submit below, and we might answer it on the show. Ask The Milk Check Transcript: [Intro commercial text not included] Ted Jacoby III: Coming up on The Milk Check. Are you saying if we produce 2% more cheese and it all has to go into the export market, it’s gonna be a price war? Brianne Breed: Yes. Ted Jacoby III: Welcome to the Milk Check from T.C. Jacoby & Co., your complete guide to dairy markets, from the milking parlor to the supermarket shelf. I’m Ted Jacoby. Let’s dive in. Ted Jacoby III: Hello, everybody, and welcome to The Milk Check. Today is September 21st. Today we’re gonna talk cheese. I’ve got my cheese team here today. We’ve got Brianne Breed, Jeff Daanen, Miguel Aragón, Jennifer Kuo, and Michael Brown joining us. We even have Diego Carvallo to help us talk a little bit about international. But we’ve talked a lot about cheese, we’ve talked a lot about how much cheese we’re producing and how whey protein seems to be driving cheese production right now. But I thought we’d get some really great insights from our cheese team in terms of what they’re seeing out there. Bree, I’ll start with you. If you had to explain the U.S. cheese market right now without even looking at CME prices, how would you describe it? Brianne Breed: There’s a lot of cheese out there right now, especially a lot of cheddar. The large plants that have expanded over the last few years are running very full, and a lot of that is because of what you mentioned: with whey being in high demand. We’re finding a lot of cheese out in the market. Exports have been very strong. I think that there’s been a really big push over the last few years to get more and more cheese exported from the United States, and we’ve been very successful. Mozzarella seems to be growing every year. But at the same time, domestic demand has definitely slowed down. Restaurants lost maybe 1% to 2% foot traffic this year. Retail demand is also down to flat. We’re in this weird spot right now where we have a lot of cheese being made and we’re exporting a lot, but domestically, we’re not consuming as much as we have in the past. Ted Jacoby III: What’s going on in the domestic market? Are we seeing any growth anywhere? Brianne Breed: We are seeing growth in a few of the pizza chains that have been making some good pushes using mozzarella and some good deals just because, you go to out to a restaurant right now and it’s very expensive to feed a family of four, where you can just order a couple of pizzas and have your fixed cost. You know what you’re paying. And so pizza’s been doing better than it was the last couple of years, which I guess you could say is great because it was struggling for a couple of years there. But as far as anything positive domestically, it’s been a struggle, I think, on the cheese side. The positives are really more on the powder side and on the UF side. The protein demand for Americans right now is just crazy. I’ve never seen it like this, and we’re seeing cheese being made just so we can get the whey stream, and we’re seeing some cheese manufacturers lose some of their farmers because those farmers are actually taking their milk to other plants that maybe are making UF milk to go into protein beverages. Ted Jacoby III: Mike, I’m gonna ask you this question. One thing that seems really odd to me is that we’ve been talking about protein a lot. The whole nation seems to wanna be talking about protein, but it doesn’t seem to me that domestic cheese demand is participating in the big increase in demand for protein, yet for years we’ve always talked about cheese as a protein, comparing it to meat, in terms of where it fits on the pyramid. Mike Brown As far as cheese and protein, people just don’t affiliate it as a protein source like they do, for example, all the nutrition beverages that we’re seeing now and some other products. It tends to be fairly high calorie, although we know it’s very nutrition-dense. And so, when consumers are looking for that avenue to increase proteins, particularly quality dairy proteins in their diet, it’s pretty evident they’re moving toward the beverages and the bars, even though cheese is a good source. It’s been a bit of a surprise, particularly with butter being so strong, that cheese retail sales haven’t had a little more lift than they’ve had. They’ve been pretty flat. I think a lot of it is just how we’ve promoted those protein beverages and the focus, and frankly the shelf space they’re now getting in a lot of your stores, particularly your big box stores and your big club stores. Ted Jacoby III: Okay, thanks Mike. Jeff, what are you seeing out there? Where are the places where you see demand being decent domestically for cheese? Jeff Daanen: Pizza sales seem to be extremely strong, and mozzarella is tight. There seems to be plenty of colored cheddar out there. Retail is down, food service is down. I don’t see where we’re gonna see any relief real soon. White processing solids are still in high demand for processing plants. We heard that there’s a big expansion going on down your way and there’s a big expansion for making processed cheese in Minnesota as well, too. So, I think that will stay strong. The one thing that there is a lot of is colored processing solids that really are hard to get placed. Ted Jacoby III: What about the export market? Jen, what are you seeing out there? Jennifer Kuo: Export demand is really good this year. I think the biggest barrier are a lot of the things we cannot control. Obviously, freight has been really bad both domestically and internationally this year. It’s hurting everybody’s budgets. The demand is there. What we’re learning is that there’s more opportunity for new and innovative ways to get cheese into the international market. They don’t necessarily have all the conversion capabilities that we do in the U.S., so we’re moving more finished retail-ready goods internationally than we do domestically. But those are all, avenues we’re pursuing, and the demand is there. We are surprised, I think, month over month that freight keeps going up and the customers keep placing orders, so don’t know where that kind of ceiling will start making an impact. But as of right now, we are able to move even a good amount of colored cheddar overseas, more than we have in the past. That’s the metric we use domestically to measure how much colored cheddar volume are we moving. That’s what the market is based on. Overseas, it’s more a combination of many other different kinds of cheese. Not necessarily as colored cheddar-based, but it’s still, a good measuring point for many of our customers. They still understand that’s what we make day in and day out. But yeah, we have seen good growth in Asia, the Middle East, and South Americas, and Australia. Oceania is still very strong. We’ll see what happens if freight doesn’t start leveling off. Ted Jacoby III: Miguel, how about you? What are you seeing as we look south? Miguel Aragón: I have to echo what Jen just said. We are seeing still a lot of interest in Mexico and the rest of Latin America. But there are three things I’m really looking at right now. I’m looking at what the CME is doing because that is helping, undoubtedly. But freight is hindering us. However, the exchange rate is favorable right now. If any of those three things change, if the CME starts going up or the exchange rate starts going up and the dollar starts getting stronger we may see some movement in regards to demand. But right now, so far, whatever freight was gonna hurt us is being helped by the CME. The second thing is that the types of cheeses that are going into these markets like Mexico, Colombia, Peru, Chile Panama, are diversifying. We are no longer just shipping a cheddar. Now, we have a lot of demand for Colby Jack, Pepper Jack, Gouda, Monterey Jack, feta, others that we never used to have before. The market is diversifying. And of course, we do have a lot of demand for mozzarella still. Ted Jacoby III: When we talk about international cheese demand, is it more restaurant-driven, food service-driven, or is it more retail-driven? Miguel Aragón: At least a lot of our clients are food service and retail. Ted Jacoby III: So both? Miguel Aragón: They’re both. They’re both. We have requests for for pound blocks that are going to converters that are either, cutting or shredding the product. But, also, we’re finding a lot of requests for five-pounders or retail packages ready to go. So, we’re seeing it in both places. Ted Jacoby III: We’ve seen some really excellent growth just in international cheese demand in general. One of the slides when we had Will Loux from the U.S. Dairy Expo

  3. Aug 31

    Powder pops. WPC 80 slips. Dairy proteins defy gravity.

    Nonfat rallied nearly 30 cents in about 15 days. Can that rally can hold? WPC80 is showing its first real signs of softness in a while. Is it a seasonal slowdown or a sign? And milk proteins are still finding support. Will demand stay strong as new products come online, or will the economy finally put a lid on protein? In episode 105 of The Milk Check, host Ted Jacoby III and the T.C. Jacoby & Co. team focus on two of the busiest corners of the dairy market right now: nonfat and protein. In this episode, we cover: Why low inventories could keep powder markets volatile How exports, Mexico and production interruptions contributed to the move How the price gap between whey and milk proteins is encouraging reformulation What consumer spending, GLP-1 use and alternative proteins, and the economy could mean for dairy protein demand But this is still a market with plenty of unanswered questions. Listen as the team at T.C. Jacoby & Co. shares their view and outlook on what’s coming and why. Listen to The Milk Check episode 105: Powder pops. WPC 80 slips. Dairy proteins defy gravity. Also available on: Amazon Music, Apple Podcasts, Spotify, and YouTube. Got questions? We’d love to hear them. Submit below, and we might answer it on the show. Ask The Milk Check Transcript: Ted Jacoby III: [00:00:00] Coming up on the Milk Check. Diego Carvallo: We’ve had a 28 or 30 cent nonfat rally in a matter of about 15 days that caught a lot of people by surprise. Ted Jacoby III: Welcome to the Milk Check from T.C. Jacoby & Co., your complete guide to dairy markets, from the milking parlor to the supermarket shelf. I’m Ted Jacoby. Let’s dive in. Ted Jacoby III: We are going to have a very focused market discussion. We’re recording this on August 24th, and the reality is, so far in the milk side of the business, things have been relatively underwhelming. We’re expecting milk to tighten up. It has, but only in a very normal way, so nothing huge to talk about. Cheese has been a non-event. The cheese market is very quiet right now. We’re expecting it to stay quiet. But there’s been a lot going on in nonfat and a lot going on in protein. So we’re gonna focus on nonfat and protein today. Diego, let’s go ahead and get started on nonfat. What’s been going on in the nonfat market, and what do you think is gonna happen next? Diego Carvallo: It’s been a very interesting market, Ted. We’ve had a 28 or 30 cent nonfat rally in a matter of about 15 days that caught a lot of people by surprise. We went from about $1.45 per pound to $1.75. And now we’re slightly below that. We’re close to the 1.70, but the CME spot market has remained at a premium. I think what led to this rally were a couple of things. One is when we got to 1.45, we became very competitive for skim milk powder. And we know for a fact that a few of the large producers in the U.S. made very interesting sales for exports after having exported very little for this year so far. That helped manufacturers and the whole market, find some sort of psychological support to prices. And then, at the same time, we noticed how several of the manufacturers were in a relatively good spot when it comes to sales for August and September. They were not having burdensom inventories, and they were pretty proud with their offers. So I think the whole market realized that Mexico still had a few shorts that they needed to cover. We made some international exports after not exporting for a while, so I think the whole market found some support and it rallied quite a bit. I was also surprised to see that rally. I think we got to the $1.75 and we started seeing pushback from Mexico. We started not being competitive in international markets again. And I wouldn’t be surprised if we see a correction in the coming days. At the same time, there are some rumors and also facts of production interruptions by some manufacturers. That also got people nervous, and I think that also contributed to the market rally. Ted Jacoby III: What do you mean by production interruptions? Diego Carvallo: There’s news that have gone around about some plants having recalls and some also production issues that have delayed [00:03:00] their releases. That added to a market that was nervous already. Ted Jacoby III: So, basically, a supply chain that has been relatively low on inventory to begin with, any kind of potential supply disruption such as another FDA recall or something that at least holds that product for a little while, the market’s just pretty sensitive to that, and that’s causing this extra volatility. Diego Carvallo: Exactly. Yep. Ted Jacoby III: Jake, what has this volatility been doing to the hedgability of our nonfat market? Jacob Menge: We’ve seen pretty poor CME NDPSR correlation compared to history. I don’t know if poor correlation is the word, but if you’re in short-term hedges you have a coin flip here of how well that hedge is gonna work for you. But in general the market’s actually been pricing in lower volatility than what we have actually realized. That’s over a multi-month period. So there might be a week where you are along for the ride of a really sharp move one way or the other. But in general I would say it’s been fairly functional, the market has. Weird low volume in some of this volatility. I think that’s probably the one note is you’ll have really volatile markets like this. I would have expected better volume like we saw with our crazy run-up in February, March, whenever that was. Ted Jacoby III: What do you read into the low volume? Jacob Menge: Yeah, I don’t know. They’re numb to it now, after what everybody experienced in March, a quick little, 15, 20 cent pop doesn’t scratch the itch anymore. The market probably was a little bit better covered than they were back in February, March. So, even though the pop happened, more participants could sit on the sideline without panicking yet. Now, if we continue at these prices for another month or something like that, there’s gonna have to be more buyers, and I would imagine that leads to some more participation. Ted Jacoby III: Diego, how do you see this market playing out over the next three to six months? Do you think the volatility comes out of the market, or do you think we’re on this rollercoaster and we still gotta stay buckled up? Diego Carvallo: I think we’re gonna still have volatility, Ted. And the main reason is Europe, which is a significant player for the SMP market has gone through very bad weather. It’s gotten very hot. Solids in the milk are going down, and for that reason the cheese plants are having to use more milk. So, there’s fewer volumes of liquid milk hitting the dryer at a period where we have little inventories in Europe, so I think that’s gonna contribute to high volatility. And the same scenario can be said of the U.S. We don’t have much inventory. The manufacturers are sitting in a good spot in terms of availability. They do not have too much pressure to sell. So, any type of disruption to supply chains, production, or any pickup in demand, it’s gonna result in big swings, both ways, not only up. Josh White: I think that our seasonality has shifted. We’re already hearing rumblings that there’s some Ramadan buying beginning [00:06:00] to happen. That’s business not too many years ago didn’t happen until the first quarter. That helped create a outlet to clean your inventories before the heavy seasonal production for Europe and the U.S. Now, that business is trying to get in front of Christmas business and Chinese New Year business, and it’s coming at the worst time, when the U.S. is in a short squeeze, Europe is going through a heat wave, New Zealand’s not yet completely online, and it’s keeping things tight. My personal opinion is that we’re drowning in nonfat within the first quarter. We don’t have anywhere to go with it. This whole phenomenon’s been set up that we’ve been selling nonfat domestically somewhere that used to take skim solids. Somewhere in the margins, people are buying powder that usually interchange between powder or cheap skim, that it may have been buying skim more recently. Right now is the tightest time ever to be selling UF products, yet everyone’s responding with incremental UF production at the same time that everyone’s launching more UF competitive products. That’s gonna be saturated at the exact same time we don’t have anywhere to go with powder. Q1 looks ugly to me from a skim solid standpoint. Ramadan is like the second week of February or slightly before, which means that Chinese New Year, they’re within a few weeks of each other. Last year they were already bumping into each other, but there was plenty of inventory. Don Street: You get through October, typically we would say U.S. Christmas demand, certainly for nonfat, is filled at that point because you’re manufacturing things, cookies, crackers, whatever, and that would also be your lead time to ship. So, you could even see, if you’re right, this convergence to the downside in November, December, even before Q1. Josh White: I think markets have been really smart, too. Whenever we find the points at which we think it happens, it seems like the market’s anticipating, and we’ve been trading anticipatory markets, and it’s moving a little bit in advance of that. This sounds really smart until you realize you’re already in it. I think we are already in it, and that’s created a little bit of the bump that we’ve seen right now as everyone’s trying to get in front of short covering. Every sell-off I think is gonna be met With buying for the next month or so. Ted Jacoby III: Everybody, we will be right back after these messages. Diego Carvallo: I’m Diego Carballo with T.C. Jacoby & Co. T.C. Jacoby & Co. specializes in international dairy markets. For new customers that haven

  4. Aug 5

    Can the U.S. Keep Its Dairy Export Advantage?

    We’re excited to have Will Loux, senior vice president of global economic affairs for the U.S. Dairy Export Council, join us to share his presentation of the future of U.S. dairy exports. For years, the U.S. dairy export portfolio has leaned heavily on nonfat dry milk, skim milk powder, lactose and lower-protein whey products. But our exports are changing. In the latest episode of The Milk Check, host Ted Jacoby sits down with Will Loux to break down the changing U.S. export picture. In this episode, we cover: Why U.S. dairy exports are moving toward cheese, fats and higher-value proteins How domestic protein demand is pulling skim solids away from dryers Why more cheese may be produced partly to create additional whey protein How exports are absorbing a larger share of new U.S. cheese production Where Latin America offers room for additional cheese growth What it will take for U.S. butter exports to become more consistent and profitable The U.S. has the milk. It has new processing capacity. And it is capturing a growing share of international cheese demand. But growth creates new challenges. Are you ready to meet them? Listen to The Milk Check episode 104: Can the U.S. Keep Its Dairy Export Advantage? Also available on: Amazon Music, Apple Podcasts, Spotify, and YouTube. Got questions? We’d love to hear them. Submit below, and we might answer it on the show. Ask The Milk Check Transcript: Ted Jacoby III: [00:00:00] Coming up on the Milk Check. Will Loux: What I’ve heard from folks in Europe and elsewhere is how do they manage the U.S. tsunami of exports that’s coming? And I think that, at the Export Council, it makes me excited, but it does mean we need to keep our strategies current. Ted Jacoby III: Welcome to the Milk Check from T.C. Jacoby & Co., your complete guide to dairy markets, from the milking parlor to the supermarket shelf. I’m Ted Jacoby. Let’s dive in. Ted Jacoby III: Today, we are very excited to have Will Loux, Senior Vice President of Global Economic Affairs for the U.S. Dairy Export Council joining us.  A few weeks ago I saw a presentation that Will gave that talked about where the U.S. dairy industry is going, especially from an international perspective. It was an absolutely fantastic presentation, and I couldn’t help but think that just this presentation alone would be an absolutely fantastic topic for our podcast.  I have a bunch of our traders joining us, many of our usual suspects, including: Ted Jacoby III: Diego Carvallo, Joe Maixner, Miguel Aragon, Mike Brown, all from our trading team. Guys, thanks for joining us. Will, thank you so much for joining us. It’s great to see you again. Will Loux: Good to see you, Ted. Thanks for having me on. Ted Jacoby III: Excited to have all of our listeners listen to this. Will, the floor is yours. Will Loux: Perfect. Well, thank you for having me, Ted, and glad to have so many people on here and another audience for this presentation. I’ve got some slides. For those of you like me who will listen to this podcast usually while driving, feel free to go check it out on YouTube. I am also gonna do my best to reference what is in those slides as best I can remember to do so. But what is the future of U.S. dairy exports? What we’ve seen, really over the last twenty-five years, has been this tremendous, consistent growth, in aggregate U.S. dairy exports. We just got May data, and what we saw was on an annualized basis over the last twelve months, the U.S. actually set a new record again. So our exports have never been higher than they are today. But that said, our exports look fundamentally different than what they did 20 years ago. Before, when we were getting started with exports, 75, 80% of our exports were really driven by nonfat dry milk, and low-protein whey products, and lactose. That’s been the vast majority of our portfolio for much of this time, and we’ve had a few different eras where we’ve seen U.S. cheese exports picked up, especially around 2014 when the world was short of milk and we saw U.S. cheese and butter go overseas. But then we saw that stagnate for a few years. Now, what we’ve seen since COVID has been this tremendous growth of these more value-add products, these specialty products. I believe the U.S. is moving towards a portfolio in the export market that looks a lot like cheese, fats, and proteins. And that’s gonna be the core of our exports, I think, going forward because the U.S. dairy industry is really kind of, I consider it an evolution rather than, like, a true revolution. But this is one of those facets that I think is really interesting to see is the U.S. has consistently been growing its exports, unlike a [00:03:00] lot of other supply origins. But this is one that I think as we go forward I’m really excited about. But it’s gonna change how we need to think about exports over the next few years. Ted Jacoby III: Will, it sounds like what you’re saying is not only are we seeing the total volume of exports go up, but the dollar per pound value is even going up faster because we’re switching away from that low-cost carb portfolio to a much higher-value protein, fat, et cetera portfolio. Fair to say? Will Loux: I think that’s exactly right. I think there are implications for that, too.  That if the U.S. is moving out of perhaps exporting as much skim milk powder or sweet whey because we’re instead making UF milk or cottage cheese or yogurt or high-protein whey, well, there’s still demand overseas for that sweet whey and for that skim milk powder. But now, it’s actually getting supplied by a few other countries, too. So, we do have to keep all of these things in mind. But to me, I think we’re moving up the value chain as the U.S., and what I’ve heard from folks in Europe and elsewhere is how do they manage the U.S. tsunami of exports that’s coming? And I think that, at the Export Council, it makes me excited, but it does mean we need to keep our strategies current with where we’re gonna go in the future. One of the things that I’ve noticed here over the last really few months but even going back to last year has been a real shift in how the U.S. dairy market is balancing itself. I would argue that for the last really 20 years, to be frank, but at least for the last 15 years, the U.S. dairy market has largely been balanced to domestic fat demand. Yes, we did see, certainly, exports of cheese grow over this time, so I don’t want to discount that as a butterfat-heavy product, but for the most part, what we’ve seen has been the U.S. has consistently balanced with where domestic demand for butterfat has grown, and then we’ve exported the skim solids largely in the form of nonfat dry milk and sweet whey overseas. What we’ve seen here over the last several years has been the U.S. switching from a traditionally balancing to domestic milkfat demand, where we’ve seen butter consumption grow, whole milk consumption grow. U.S. milk production, U.S. dairy production grew with that. And then, we exported the additional skim solids in the form of nonfat dry milk, sweet whey, high protein whey, lactose. Those products were the ones that we were really exporting. Now, what I think is happening is the U.S. is no longer really balancing to fat anymore. We’re in this precarious balance right now. We’re not quite balanced to protein yet, and we’re not quite balanced to the beef market yet because we still have high prices for protein. We don’t have enough of it to go around. We don’t have enough beef for the beef market to go around, but we also have more milk fat than the domestic market can consume. And so we’ve seen these exports really rise. So, I think what we’re seeing right now is the U.S. being pulled in different directions, and the U.S. exports as we go forward here over the next few years is in some ways at a crossroad as to which of these routes do we go. Do we swing back to balancing to milk fat, which would mean we’re probably short of protein, or do we start balancing more to protein, which means we’re gonna need to find homes for a heck of a lot more cheese and butter in the next few years. [00:06:00] Because to me, at least, if you look at the beef market, from a dairy farmer’s perspective, you are still seeing that incentive to add additional cows just based on the returns on the beef side of things. And because of that incentive to hold the dairy cows longer to get the additional black calf, also with that breeding the best of the best in the young stock, we are just seeing the largest milking herd since the 1990s and the lowest replacement herd since the 1970s. And everything we’re seeing on the beef cattle side of things would suggest this isn’t slowing down anytime soon. But from the U.S. perspective, I think what this means is we’re gonna continue to see more milking cows around, and those cows are getting more productive than ever before. And even as we’re seeing this surge in milk production, I think on a component basis, last year in in 2025 we were up 3.8%. This year we’re up not quite at 3%, but still pretty darn close. Even as we see this growth of milk, these additional black calves coming on the market, we actually still don’t see enough protein hitting the dairy markets right now. And so, what we’re seeing is even as we see this huge surge in cottage cheese production and yogurt production, my personal opinion is yogurt doesn’t get enough credit for this protein rally. It’s like 10X the volume of cottage cheese, but what we’re seeing right now is this pull of protein. I think this pull of protein is predominantly domestic. We’re seeing UF beverages, we’re seeing yogurts, we’re seeing cottage cheese, we’re seeing everything that whey protein can go into from cereals to snacks to beverages. All of that protein pull is basically sucking pro

  5. Jul 30

    The Perfect Storm for Milk Solids

    Milk already feels tight across much of the U.S. That could be the setup for a perfect storm. Summer heat, warm nights, wildfire smoke and plant disruptions have pressured milk production and moved milk into unexpected places. Now, Class I bottlers are preparing for schools to reopen just as cheese plants, protein beverage manufacturers and other processors compete for the same milk solids. In this episode of The Milk Check, guest host Josh White and the Jacoby team break down what could make August, September and October especially interesting for dairy markets. We cover: How heat, smoke and limited nighttime cooling affected milk production Why school bottling demand could tighten the market further How the cybersecurity disruption temporarily increased condensed skim availability How conflict, Red Sea risk and higher freight costs are complicating dairy exports The dairy market is not moving in a straight line. But competition for milk solids is building, and the next few months could determine which product sectors get the milk they need. Listen to The Milk Check episode 103: The Perfect Storm for Milk Solids. Also available on: Amazon Music, Apple Podcasts, Spotify, and YouTube. Got questions? We’d love to hear them. Submit below, and we might answer it on the show. Ask The Milk Check Transcript: [Opening commercial] Josh White: [00:00:00] Coming up on the Milk Check. Jennifer S. Kuo: The Red Sea seems to be an issue now as well. Tyler Jokerst: Yeah. Josh, if the Houthis are getting involved, when you’re looking at Yemen that’s a direct effect on the Red Sea, which is the other half of that peninsula . And then it starts to limit the only access point that you can have into the Red Sea being through the Suez Canal. Josh White: ​In absence of our fearless leader, Ted we invite our audience to join us for one of our bi-weekly commercial meetings, where our group gets together and breaks down the market based on our individual disciplines. Today’s group is a fairly large one but we have members representing our fluid team, our ultrafiltered and cream team, cheese, butterfat, milk powder, and whey, which makes up our trading group.  We’re in the dog days of summer right now, schools are out, families are traveling. There’s people out of the office not making decisions. That’s happening both in the U.S. and in Europe. Let’s touch on current market, climate, what we’re experiencing, and then what we’re paying attention to or looking out for in 30 days time. Let’s start with where we’re at on the milk side of things. Greg, both you and Jared, have experienced a little turbulence over the past week or so with some milk movements. We’re just coming out of a big heat stretch. We’re on the cusp of the South starting to refill its bottling pipelines. What are you feeling and seeing right now, Greg? Greg Scheer: We’ve had some plant closures that have pushed milk around the Mideast, the Northeast, and, around the country. We have had a week or two of that. The first heat wave, back several weeks ago, hit the cows harder than expected, and I’m wondering if maybe that’s the age of the herd is a little older that maybe it hit them a little more. Usually, you have a heat wave, the cows recover some. Normal summer, they get another heat wave, and then, it hits them a little harder the second time or third time. Seems like the first heat wave hit the cows a little harder. I think production’s down just a little bit more than we expected or earlier than maybe a normal summer. Other than plant problems that push milk around, it feels tight. We get to next month, schools start up again or are about to, and bottlers start putting milk into the bottle for schools, then it’s gonna get really tight and could be tight through September, October when maybe production comes back a little bit and the pipeline gets filled, and then it levels off demand a little bit. It feels tight other than plant closures. It’s gonna get really tight in a month. And, we’ll see where it goes. But production does seems like it was hit harder. I’m just wondering if maybe the age of the herd may have a little bit to do with it. Josh White: It was also pretty warm nights for the Midwest. It’s pretty well documented that above 70s: tough on cows; below 70s: allows them to recover nicely. I’m in Gurnee, Illinois, which is Grand Rapids [00:03:00] latitude on the Michigan side. For us to get nights above 70 is rare. And we just went through a pretty good stretch where we had a lot of them. The entire Mideast and the Midwest, we went through a solid four or five days of pretty bad smoke. At least our area was bad enough that just walking outside to get your mail, you could taste it. So I can’t imagine that helped anything. Greg Scheer: How much it hurt is hard to quantify maybe, but definitely didn’t help things. Josh White: Are we still really talking about two different countries, more or less? California, everything seems to be fine. They’re running great. They’re just pumping out milk, and then the rest of the country where it feels a little tighter? Greg Scheer: That’s the sense I get everybody I talk to. Yes. You’ve got California on an island there just filling up their plants, and everybody else in a tighter feel, all the way from the Upper Midwest, Mideast, Northeast. And then as you mentioned, I do think the pull to the Southeast will be starting fairly soon as their production slows, and by mid-August when they’re bottling for schools it’ll really get tight. Josh White: Europe is also talking about some of the same things. Heat sounds like it’s impacted France the most. Germany’s been pretty resilient. Everything I’ve read or heard is that in the recent weeks, people have taken their milk production forecast for the remainder of the year down in Europe, and by a noteworthy amount. To be clear, I think most expect European milk production for 2026 to be higher than it was in 2025, but it’s been notably higher through June. And looking ahead, for them to be taking those numbers down to modest growth means that they’re expecting year-over-year numbers to be down the second half of the year. So Europe seems to be slowing its rate of growth. Curious to what that means going into 2027. We seem to be making good milk, and we’ve got plenty of ability to process it, but the rest of the world feels like it’s starting to slow its growth rate, and maybe start to slow down as we look ahead to 2027. Class I plants looking to start filling up a bit in the next two to four weeks. Jared, what’s that mean for you and your team and your products? Jared Miklasz: Yeah, moving over to the condensed and fluid skim side, the market has become noticeably longer over the past couple weeks, and the obvious driver there was the disruption that Fairlife experienced, which affected multiple plants across the country. With those plants still operating below full capacity following that cybersecurity event, milk that would have normally went into their UF and finished protein beverages has been redirected into balancing outlets which, in turn, made condensed skim much more available, and that increased availability was real. We saw a lot more local offers as a result. As operations normalize and those plants continue to ramp up, I would expect some of that excess product to be reabsorbed, although the timing remains still uncertain. Condensed skim has been tight for much of the year. Obviously, that’s been supported by the steady Demand from both Class II and III. And the strong nonfat demand has also kept skim solids competitive. As those dryers continue to pull available skim [00:06:00] away from the condensed markets school milk will also begin here, as Greg alluded to, which should move more milk back into the bottling programs and further reduce the amount of condensed skim available for manufacturing for these Q4 months. Moving over to the UF side of things, that continues to have the strongest long-term demand story. We’ve touched on it almost every podcast, but high-protein dairy appears to have real staying power. Demand is coming from athletes, consumers focused on weight management, older adults trying to maintain muscle. And that’s even beyond the folks using the GLP-1 medications who are told to prioritize protein. That demand also extends well beyond protein shakes. It’s into yogurt, lactose-reduced products, other nutritional beverages, other applications that require greater control over protein, lactose and total solids. But the other key part of that is the cheese, as that’s an important outlet for UF. As those butterfat levels in the farm milk continue to rise, high protein UF can help rebalance that cheese vat and improve yields. The challenge is that cheese makers are competing with higher value protein beverage and yogurt for that same UF supply. More UF capacity is expected to come online, though, here later this year and into ’27, but that does not necessarily mean that the market will become over-supplied. I think the key question is whether capacity grows faster than the demand. The category obviously remains strong, although that increased competition from a wider retail perspective and potential consolidation could eventually slow growth. But so far that demand has continued to outperform expectations. That strong UF demand also tightens the broader skim market because, obviously that milk is moving into UF and no longer available for condensed skim or nonfat. But, overall improving milk production should create more opportunities, particularly in the skim market. However, that strong demand has regional processing constraints and plant reliability all play key factors here long term. Josh White: So we’re probably not gonna be moving in a straight line here, right? As production responds, we’re trying

  6. Jul 21

    Who Wins the Next Decade of Milk Production?

    The next decade of global dairy growth may look very different from the last one. For years, much of the world’s additional milk came from pasture-based systems. New Zealand added acres. Production expanded across parts of South America, Australia and Europe. But those regions are not growing the way they once did. Today, the next unit of milk is increasingly coming from grain-fed systems. That shift could put the U.S. in the driver’s seat for global dairy markets over the next 5 to 10 years. In this episode of The Milk Check, host Ted Jacoby III and the Jacoby team are joined by Scott Briggs of Bridgecape Commodities. We dive into: Why marginal milk growth is shifting from grass-fed to grain-fed systems What environmental policy and structural inefficiencies mean for European milk production Why China is shifting from building milk supply to creating higher-value dairy products Why the U.S. will need to become a more consistent exporter of butterfat Plus, beef income has helped support dairy farm margins and encouraged producers to breed more cows to beef. What happens if beef prices fall? The cows are ready. The plants are being built. What’s next for U.S. dairy? Listen to The Milk Check episode 102: Who Wins the Next Decade of Milk Production? Also available on Amazon Music, Apple Podcasts, Spotify, and YouTube. Got questions? We’d love to hear them. Submit below, and we might answer it on the show. Ask The Milk Check Intro commercial [Text not included.] Ted Jacoby III: Coming up on the Milk Check. Ted Jacoby III: You’ve got the U.S. dairy industry now in a position where even the worst-case scenario continues to be a threat for Europe or the rest of the world from a milk supply standpoint. Ted Jacoby III: Welcome to the Milk Check from T.C. Jacoby & Co., your complete guide to dairy markets, from the milking parlor to the supermarket shelf. I’m Ted Jacoby. Let’s dive in. This week, we are excited to have Scott Briggs from Bridgecape Commodities joining us. Scott lives in Australia and really understands what’s going on with dairy markets on that side of the pond. Scott, thank you so much for joining us. We’re excited to have you. Why don’t we start by having you tell everybody a little bit about yourself? Scott Briggs: Thanks very much for the intro, Ted. I’m Scott Briggs, Bridgecape Commodities, based down in Melbourne, Australia and work with a number of Asian and Oceanic consumers to try and understand global dairy markets and try and help them risk manage. Thanks very much for the opportunity to be a part of the podcast. Ted Jacoby III: Scott, thanks for joining us. We’re really excited to have you. We’re gonna have a little bit of a debate: How do U.S. dairy production costs compare to those in New Zealand, Europe, and China today? Do we think the U.S. is building a lasting competitive advantage? And what does that mean for the global dairy market over the next five years? Scott, I’ll start with you. You’re based down under. Do you think the U.S. Is developing a competitive advantage, or do you think New Zealand will continue to be in the driver’s seat? Scott Briggs: It’s a very big topic Ted, but I think the short answer is that yeah, the U.S. is really in a great position to drive global dairy markets over the next 5 to 10 years. One of the major things that’s changed probably since about 2015, we’ve been in a transition period where the marginal milk growth is not coming from a grass-fed system anymore, it’s coming from a grain-fed system. Between 2000 when a lot of global dairy markets started to deregulate and we had falling trade controls and those sorts of things, quotas in the EU eventually coming off, between 2000 and 2015, the marginal milk growth was really coming from a grass-fed system, be it New Zealand growing the number of acres that it planted or the number of acres that it farmed. Places like Uruguay or southern Brazil or Argentina growing quite strongly and other parts of Europe and Australia as well. So that was the driver of the growth, and that’s why we saw that volatility in global dairy markets driving back towards a grass-fed cost of production. But since then, those places have stopped growing and really the next unit of growth or the next liter of growth comes from grains and ultimately that does mean that the U.S. is in a great position to respond to the milk production needs of the world. At the end of the day, you’ve got the greatest exportable surplus of grains and you’ve got a fantastic platform to grow from. That’s the 10,000-foot view of why the U.S. is in the box seat. Ted Jacoby III: You mentioned that even New Zealand is starting to go towards a grain-based system. Could you tell me a little bit more about that? Scott Briggs: I would say that’s pretty incipient, Ted, but there’s certainly steps that are being taken in New Zealand that seem to mirror what Australia’s been doing for probably the last five to 10 years. You have a marginal cost of production that is grain-fed and it’s being led by the U.S. At the moment, if we looked at the margins in the U.S. for a dairy farmer, they’re pretty good given your beef situation. But if you were to remove that beef situation or that beef revenue, you’re probably at a pretty low income over feed cost. But that’s still a highly profitable milk price for a grass-fed system. And a lot of the fixed costs are already being paid off, be it the farmer’s labor the equipment on the farm all of those overheads, they’re already being paid off by a pasture fed system. So, there’s a huge marginal return for that extra liter of milk that comes out of a pasture fed system. If you look at the steps that have occurred in Australia and that are probably starting to come to New Zealand, it is a lot more shared housing in wetter areas, feed pads, dry feed pads. It’s certainly not moving to the barn fed system that the States has got. More multiple calvers, if you like, to flatten out that milk curve. A lot more maize silage production, which just stores that little bit better and gives you more dry matter per acre as well. It’s these kind of marginal steps which have occurred a lot in Australia or even in some of our more grass-fed areas, and that are starting to occur in New Zealand. And some of the incentives that are being given, market-wise, in New Zealand to produce that shoulder milk or that additional milk are starting to respond with additional investment on farm. Ted Jacoby III: So, is maybe another way to put it that core pasture-based part of New Zealand dairy farming continues to be very profitable, but any marginal increase in milk production that would come from New Zealand, the cost of that marginal increase is probably the same or more likely probably less than the same marginal increase in milk production in the U.S.? Scott Briggs: Look, I would say that the marginal cost of production out of the States is pretty good. If you think that you’ve already got all the infrastructure paid for and it’s really just an additional growth there. But I think it’s more so the profit margins that sit in a pasture-fed system in New Zealand allow for that investment to try and get that little bit of extra milk as well. So, I wouldn’t say either or are better placed. It’s just that we do have a lot of low-hanging fruit in Oceania, if you like, to start moving into that kind of system. Ted Jacoby III: That makes sense. That makes sense. Mike Brown (2): One thing I think about New Zealand and why the system is the way it has been historically has been your cost of concentrates or grains hasn’t always been as competitive. You lead world price in a lot of cases, and your location makes you very competitive. Your dairymen have more room to pay some of those higher costs for that marginal production. So my question is the strong world price has a fair amount to do, obviously , with everybody’s growth, but in your case when you look at that difference in marginal cost versus that pasture based cost, are you more sensitive to that marginal change in price than maybe some other markets just simply because your feed costs are higher? Scott Briggs: Let’s have a look at world milk prices at the moment. The U.S. at $17 a counterweight, if you like, $16.50, $17 a counterweight. That’s low on your range. On the New Zealand numbers, that’s coming out at a $9.50 dollars per kilo in New Zealand dollars, which is a historically pretty high milk price. So, they do have that ability to just bring in PKE exports. One of the major sources of additional feed or additional milk growth in New Zealand is this palm kernel expeller which comes off of the palm kernel crushing. It’s kinda like soybean meal, if you like that they bring in from Indonesia and other palm kernel or palm crushing countries. Fonterra had placed limits on that for a long period of time because it was affecting the fat composition of the milk. Once they removed those limits, PKE imports went up 20% or 30% almost in one or two years. The last two seasons, New Zealand milk growth has been about 4% or 5% this year, and probably 2% or 3% the year before, so 6 or 7%. Nearly a third to a half of that has come from the additional energy that’s coming in the PKE. So it’s having a huge marginal impact on their growth, and it’s coming at a pretty low cost ’cause it’s a low-cost feed source. So, I think, Mike, going back to your question, they have that ability to grow because there’s such a lot of low-hanging fruit between that grass-fed cost of production, which is already paying for their farm, and the milk price that they’re getting paid, which is actually a marginal cost of production out of the U.S. Mike Brown (2): What kind of world fat price might change their incentive on PKE? We’re seeing a little bit of that here because it’s very e

  7. Jul 9

    Screwworm, Bird Flu and Foot-and-Mouth Disease: Is U.S. Dairy Ready?

    Disease pressure is back in the dairy market conversation. New World screwworm has moved into the U.S. Avian flu is still lingering in dairy herds. Foot-and-mouth disease is also back in the conversation after a recent Dutton Ranch storyline raised questions about what an outbreak would mean for U.S. cattle and dairy. So, we got together the experts and asked: is U.S. dairy ready? Listen to the episode. Listen here. Also available on: Amazon Music Apple Podcasts Spotify YouTube In this episode: In The Milk Check episode 101, host Ted Jacoby III is joined by Jamie Jonker, chief science officer and vice president of sustainability and scientific affairs for the National Milk Producers Federation, and Sarina Sharp, market analyst for the Daily Dairy Report and Risk Manager at Ag Business Solutions. We break down what these disease risks mean for dairy cattle, milk production, farm-level disruption and market economics. We cover: How screwworm could disrupt individual dairy farms Why the closed border with Mexico is changing feeder cattle flows, beef prices and dairy farm economics Where avian flu stands today, and why current cases are not affecting dairy like they did in 2024 Why foot-and-mouth disease remains a low-risk, high-consequence threat for U.S. livestock Get up to speed on what animal health risks mean for milk production, dairy markets and farm-level decision-making Listen to The Milk Check episode 101: Screwworm, Bird Flu and Foot-and-Mouth Disease: Is U.S. Dairy Ready? Got questions: We’d love to hear them. Submit below, and we might answer it on the show. Ask The Milk Check TMC-Intro-final Ted Jacoby III: Coming up on the Milk Check. Sarina Sharp: The border is shut, and it doesn’t look like it will open anytime soon, so we just have this vacuum of Mexican beef cattle. Ted Jacoby III: Welcome to the Milk Check from T.C. Jacoby & Co., your complete guide to dairy markets, from the milking parlor to the supermarket shelf. I’m Ted Jacoby. Let’s dive in. Ted Jacoby III: Today we are excited to have two special guests. First, we have Jamie Jonker, chief science officer and vice president of sustainability and scientific affairs for the National Milk Producers Association, And second, we have Serena Sharp, the excellent market analyst who does our weekly market report. Serena, Jamie, thanks for joining us today. We’re excited to have you. Jamie Jonker: Thank you for having me here. I think we’re gonna have a number of things that are quite timely to talk about today. Sarina Sharp: Thanks for having me again. Ted Jacoby III: In addition to those two, we have some of our usual suspects. We have Mike Brown, our VP of dairy market intelligence. We have Jacob Menge, our VP of trading strategy and risk management. We have my brother Gus, president of the dairy fluid group. We have Josh White, our VP of dairy ingredients. And we have Tristan Suellentrop on our sales and marketing team, and Manuel Polzer, who is part of Jake’s risk management team. Guys, thanks for joining us today. So the topic we’re gonna be discussing today, there are three different diseases that have been gaining news in terms of how it might be affecting milk production and dairy cows. The first would be screwworm which has come across the border from Mexico, the second is avian flu is back. And of course, the third is Dutton Ranch recently had an episode that talked about foot-and-mouth disease on their cattle farm in Texas. And so of course, we’re getting questions about that. But we’ll start with the one that’s probably getting the most attention, and that is screwworm coming across the border from Mexico. It is now in Texas, and it is in New Mexico. Jamie, why don’t you just give us a brief background on what is screwworm, and how does it affect dairy cattle versus beef cattle? Jamie Jonker: Yeah. Great question, Ted. New World screwworm is a fly that, lays its eggs in mammals. It was eradicated from the U.S. in the mid-1960s, and by 2002, it was eradicated all the way down to what’s called the Darien Gap in Panama. That is a forested area about 50 miles wide, where there are no official roads going through it. And so that was really great news about the many decades process to get it down there. What’s happened is starting in ’23, it started creeping back up through Central America through the movement of people and people moving with their animals. Got into Mexico in ’24. Started really taking off in Mexico in ’25, and then just this past June 3rd, we had our first official case in Texas. Today there are 27 confirmed cases in the U.S. 25 in Texas. Out of those about 16 are cattle, most of those are calves castrated males. There is at least one adult cattle in that. So far, all of those are beef cattle. What happens is the New World screwworm fly lays its eggs in any open wound. And when we think about a wound, I want people to understand that can be as small as a tick bite, so it doesn’t have to be a large gash on an animal. It’s very tiny. And what is very unique about the New World screwworm larvae, and also quite devastating, is that the larvae eat live tissue of the So when the eggs start hatching, and the female lays 200 to 300, it very quickly becomes an animal health and welfare issue for that individual animal. Unlike viral and bacterial diseases though, this is not directly transmissible from one animal to another. Obviously, as the larvae mature and become flies of their own, then they can continue to spread it in that area. But unlike what we’ll talk about in a little bit, the H5N1, which was highly transmissible between cows in an individual herd, this does not necessarily transmit from animal to animal. It’s when the larvae become flies, mate, and then the next generation can lay eggs in new animals So, what happens when it gets into these animals, in particular, newborn calves are highly susceptible because of the open umbilical area, they get in there, and, if left untreated, the mortality in newborn calves can approach fifty percent. However, highly recoverable if caught early and treated. Out of those twenty-seven animals, so far that have been identified at least one actually has been euthanized because that was the right decision for that animal. Where we are today, no dairy cattle so far as of June twenty-ninth when this is being recorded. But it is growing in terms of the geography where they’re finding domestic animals in Texas that have it. It’s a growing potential risk for dairy farmers that are in the Southwest. Ted Jacoby III: Jamie, sticking with beef cattle, does the beef industry handle infected cattle with screwworm right now? Jamie Jonker: Animals that have an infestation, essentially you have to clean out the larvae, then you treat the wounds. The other thing that you do is you wanna make sure that you do prevention treatment to prevent infestation from happening in other animals. Because once you have one animal infested, there’s likely a reproducing fly population there, and so there’s a higher risk for other animals in that location. There’s a number of products that are approved for prevention purposes. And they have withdrawal times, ranging, on the beef side, withdrawal times, thirty-plus days in some cases. Some of those products are also approved for use in dairy cattle. There’s a distinction that FDA does through its emergency use authorization and conditional approval processes that typically breaks between growing cattle and lactating cattle. For FDA purposes, lactating dairy cattle are twenty months of age or older, even if they’re not lactating. There’s only one product that’s approved for prevention in lactating dairy cattle at this point in time. That’s DECTOMAX. It’s an injectable product that has a nineteen and a half day milk withdrawal period and a thirty-plus day meat withdrawal period. Ted Jacoby III: Once these cows are infected and then treated, if it’s beef cattle, for at least 30 days they couldn’t be sold to a slaughterhouse, correct? Jamie Jonker: That’s correct. And we want to encourage folks to work with their veterinarian and only use those products that have been approved through the FDA processes. Because if you’re using other products, the withdrawal period is unknown; you’re setting yourself up to potentially have a residue issue. Ted Jacoby III: And how is National Milk right now working with dairy farmers in the United States to prepare for the possibility that we will have a infected dairy cow in the U.S.? Jamie Jonker: We are pulling together resources. We actually have a resource page on our nmpf.org website. And there’s a big pop-up right, right on top for New World screwworm resources for dairy farmers. We have some of our own resources. Obviously, there are lots of people putting together really great resources. We don’t need to recreate things that are done well, so we have links to other resources. We’re also keeping a keen eye on what’s happening as we get new detections in Texas, and potentially as the summer goes on, potentially in other states as well, and working with USDA, Texas Animal Health Commission, and others on keeping preparedness top of mind. Ted Jacoby III: It sounds like if you have a cow infected with screwworm, it’s reportable, and so the U.S.DA is keeping a register of where all the cows are that have been infected. Is that true for dairy as well? Jamie Jonker: Yes. If A dairy animal is found to have an infestation , the first thing we recommend, if you see something that you think might be New World screwworm in any of your dairy animals, contact your veterinarian. Because what we wanna have is an official sample taken so that they can determine whether or not it truly is New World screwworm, because some of these larvae and some of these flies, they look pretty similar, and you just can’

  8. May 22

    Is Protein a Fad, and Is Cheese Still King?

    Right now, high-protein diets are hot and cheese is still the biggest user of U.S. dairy. But will it last? Listen now Listen to the episode Also available on: Amazon Music Apple Podcasts Spotify YouTube In this episode: In this episode of The Milk Check, we pull out our crystal balls and try to see into the future of U.S. dairy. Why GLP-1 may be a catalyst, not the whole protein story How health and wellness trends are reshaping dairy demand How exports could change the future of cheese demand The consensus? Find out in The Milk Check episode 100: Is Protein a Fad, and Is Cheese Still King? Got questions? We’d love to hear them. Submit below, and we might answer it on the show. Ask The Milk Check Transcript: Ted Jacoby III: [00:00:00] Coming up on the Milk Check. The debate is: have GLP-1s changed dairy forever? Our second debate is will cheese remain king? Welcome to the Milk Check from T.C. Jacoby & Co., your complete guide to dairy markets, from the milking parlor to the supermarket shelf. I’m Ted Jacoby. Let’s dive in. Ted Jacoby III: Excited for our topic today. We are going to have a debate. The debate is: have GLP-1s changed dairy forever? The demand for protein right now is clearly extremely strong. It’s really a question of whether we think this demand for protein is a fad, or we think it’s a fundamental shift in demand that’s gonna be with us for a long time. And so I’m gonna actually put Mike Brown on the spot first. Mike, has GLP-1s changed dairy forever? Mike Brown: It certainly changed me forever. And I’m a big eater dairy for a long time. I’ve had good success with GLP’s getting my weight to where it needs to be, and one thing you do discover is that you do need to really watch your protein intake. You need to make sure you’re getting adequate amounts because you will lose muscle. I think diets in general, we’re becoming less carb-focused. We’re becoming more protein-focused. So, I don’t see it going away. Does that mean we’ll have the record-high prices we have now forever? Probably not the markets will stay strong, and I think it’s a shift in consumer demand . You just need to go into any Costco or Sam’s Club, and the amount of protein beverages they offer now versus three years ago, they’ve tripled in some cases. So, it’s definitely a market of strength. And despite the high price of proteins, people still seem to be buying it. I’ll see limits when there’s sales in different stores, which tells you that demand is still extremely strong. Ted Jacoby III: Josh, I’ll ask you next. Are we changing demand forever, or is this a fad? Josh White: I don’t know that GLP-1s are necessarily what’s changing demand forever, but they definitely are a catalyst and a disruptor right now. We were listening to a HighGround Monthly Update earlier today. I’ll echo something that was said during that update: A health and wellness trend [00:02:00] is absolutely happening, is global. They noted and cited in that, that over the last two years, gym memberships have been up in the U.S. If you go to other parts of the world that we export products to that GLP-1s haven’t yet reached, we’re seeing incredible health and wellness movements and protein consumption uptake. So, what I think the GLP-1 aspect of it is doing is that it served as a bit of a catalyst and ignited this market and forced us all to recognize this shift that we’re seeing from just calories taken in to quality of calories taken in, and that is driving a lot of incremental protein demand that the dairy space is a benefactor of to date. So, I don’t know if I really answered it, Ted. I think GLP-1 is a catalyst in forcing us to recognize a bigger trend that we’re seeing, not only in the U.S., but globally. Jacob Menge: I do think it’s pretty important to talk about the time horizon that we’re discussing because there’s a really big difference in both availability and dietary preference of protein sources globally, right? Like India, Sub-Saharan Africa, even China up until very recently was very plant protein-based. And so, even though protein consumption as a whole has certainly been growing where you are looking at depends on how much that’s actually impacting animal proteins. And so, I think that time horizon is important, right? Because we know where population growth is occurring worldwide. Population growth worldwide is actually in areas that are plant protein consumers not animal protein consumers . And you’re getting some animal protein consumers actually trending lower on population, right? You look at the population outlook for a lot of Europe. Korea was in the middle. I think they’re, like, 50/50, if I recall, on plant versus animal proteins. But I think that time horizon is a pretty important piece of the discussion. Ted Jacoby III: So Jake, I’ll ask you the [00:04:00] question. So, five years from now, are we gonna be looking back on 2025 and 2026 and talk about the whey protein fad, or do we think that we will have seen a fundamental shift in where people have invested their investment dollars in terms of what kind of dairy production facilities, processing facilities have been built in the U.S. and around the world? Jacob Menge: Five years is way too short of a timeline to see what I would call a freight train changing its course. And so, I think that’s pretty clear. We know what’s gonna be happening with U.S. exports, right? We are just set up to be the export powerhouse in the short term, and I would call five years short term for trends like this. Even though this has happened very fast, knowing again what is happening with the U.S. export picture, I don’t think there’s any way we see a material change in what’s happening in the protein space in a five-year period. Mike Brown: I think there’s one point of difference in milk proteins versus whey proteins. I think we see, because of cost difference, I think, more interest in finding, how can I use milk proteins in a product versus whey? I noticed this weekend, again, looking at a sports beverage that 30 gram protein, number one ingredient’s milk, and it’s not a fairlife(R) product. It’s an amalgamated product. Jacob Menge: Couldn’t agree more. I was certainly one level higher in just saying any dairy protein or animal protein for that matter. But yeah, when you drill down, do I think there could be shifts within that makeup? Absolutely. Mike Brown: The other thing is with whey proteins is that you gotta sell the cheese or you gotta sell the casein. And as we look at that spread in price, what’s that value of that whey protein worth versus what you get for the remaining part of the product? As we know, right now, Class IV, which is even dry milk powders and fat are worth way, way more than milk for cheese, even when you adjust for the higher protein revenues. We have a $5 spread right now between Class III and Class IV. And that always takes care of itself, but exactly how it will, I think we all know there’s interest in do I add casein-producing capacity so I [00:06:00] can get to my whey proteins rather than just cheese? If I make those caseins, where’s the market for those products? Where am I gonna be able to use them? So I think there’s lots of questions that we don’t know yet. ‘Cause if I’m a processor, one very high-value product, whether if it’s a half a pound or three-quarter of a pound yield per 100 pounds of milk, it’s not gonna drive all your decisions. It’s gonna be a factor. Ted Jacoby III: Gus, I’m gonna ask you the question: Has GLP-1 changed dairy forever? Or do you think it’s a trend? Gus Jacoby: I’m of the impression that we are certainly following the trends within Western culture to evaluate more and more the health benefits of eating better nutrition. And certainly, as time moves on, the protein component in your meal is going to be more and more important. So, I’m not going to take away from that. I think that will continue to evolve, but I also think that as we continue to evolve in that setting, other pieces of that nutrition will come to light and become the fad for a period of time. At the moment, protein is hot, and I don’t think we can get away from that. For me, just looking at U.S. milk production and how much of that milk production goes into cheese ,the ever-increasing demand in cheese, I don’t see that going away either. I think that’s an entrenched part of our society, and I think cheese is a pretty important part of the daily food consumption here in our culture as well.  I think there’s a place for both of them, and it’s hard for me to distinguish one from the other as being where we go as an industry. Mike Brown: One thing we may see is more of these protein-based dairy beverages that aren’t Class I milk take more and more of that consumer stomach. And so, we’re gonna see more of those UF-based products, which aren’t necessarily what we think of traditionally as fluid milk. And that’s where a lot of the growth has been: in the high-protein milks. Is that where the substitution will take place as much as in some other ways? Gus Jacoby: I don’t think there’s any doubt, Mike, but I would also argue that we’re probably going to eat into that Class I consumption a bit by more of this dairy protein shake, which tends to be in the [00:08:00] Class II area. Mike Brown: Yeah, that’s, and that’s what I, that’s what I meant. Yeah. Okay. If you’re gonna drink it as a Class II product, it all gets down to how regulation basically makes those products more competitive- Yeah … because of the regulated minimum price. Gus Jacoby: That would be a very Interesting discussion probably for another day relative to- what we wanna cover in our debate today. Mike Brown: Yeah. It’s a bit of a nerd fest, But we look at consumption trends, it isn’t

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Ratings & Reviews

4.1
out of 5
21 Ratings

About

Experienced dairy traders discuss current market trends that affect payments to dairy farmers.

Information

  • Creator
    T.C. Jacoby & Co. - Dairy Traders
  • Years Active
    2018 - 2026
  • Episodes
    18
  • Rating
    Clean
  • Show Website
    The Milk Check

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