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.

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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