Ben Laine

Senior Economist, Dairy Processing and Production

As a senior economist focusing on the dairy industry for CoBank’s Knowledge Exchange Division, Ben Laine produces insightful research on current and future risks and opportunities in the industry as well as long-range outlooks, providing a resource both to the bank internally and to customers of the bank. Over the course of his career, he has held positions that exposed him to many facets of the dairy industry, from the farm, to the trading floor of the CME, to retail and export markets.

Before coming to CoBank, Mr. Laine developed risk management programs and produced market outlooks at Agri-Mark and Cabot Cheese, a dairy cooperative in the Northeast. He has served on the board of directors of Dairy America, a national milk powder-exporting cooperative and holds a bachelor’s and master’s degree in resource economics from the University of Massachusetts, Amherst.


Reports

Consolidation on dairy farms in the U.S. has driven the industry into what may be a new era of longer, more drawn out price cycles. 

Help Wanted

August 2018

Part of the rural labor shortage story is best told through statistics and trends. But to gain a more full picture of how labor challenges are affecting businesses, it is best to hear directly from those meeting the challenges head on.

The risk of an escalating trade war is the greatest threat to the U.S. and agricultural economies in the near term. Nearly 70 percent of U.S. agricultural exports are sold to destinations that are under active negotiations or embroiled in trade disputes.

Consumption of traditional cow’s milk as a beverage has been declining for decades due to lifestyle changes and cultural shifts that have led to fewer occasions at which Americans drink milk. Meanwhile, plant-based alternatives made from soy, almond, pea and a myriad of other non-mammalian sources have surged in recent years.
Automation and robotics have made their way into milking parlors across Europe, Canada, and most recently the U.S. These technologies are helping sustain small and medium sized farms and relieve some labor challenges and costs; but for now, they are not a clear financial home-run for most.
An impending trade war, continued large global supplies, and negotiations over a new farm bill and tax extenders continue to present challenges for U.S. agriculture and farmer cooperatives. Reduced harvests in Argentina and potential droughts in some parts of the U.S. have steadied grain and oilseed market prices but there remains a potential for significant volatility.
As the dairy industry evolves and modernizes, the processing sector has become increasingly capital intensive. At the same time, high-quality, reliable milk supply, manufacturing expertise, and strong branding and marketing are more important than ever to compete in the global marketplace. By forming joint ventures between producers or cooperatives who can supply the milk, companies with experience in manufacturing dairy products, or companies with greater networking and marketing expertise, each participant can reduce cost and focus on their specialties.
While all exporters will benefit from global demand growth, the EU, with its years of global marketing experience, stands to extend its reach the furthest into these markets. Barring a major shift in the U.S. to a global marketing focus, the EU will seek to capture greater market share.
Unlike other agricultural commodities, the perishability of milk requires that it be processed almost immediately after being produced. Dairy processors are faced with the challenge of handling an ever-growing supply of milk, while anticipating the right product mix to meet consumer demand.
Organic milk has experienced significant growth despite having among the highest price premiums over its conventional (non-organic) counterpart. Milk had the highest sales of any certified organic commodity in 2015 at $1.174 billion and represents about 21 percent of all agricultural organic sales.
Industry consolidation on both the production and processing side has helped to even out but not eliminate some of the unbalanced market power that had previously been dominant in the industry.
With domestic demand for dairy products likely to remain flat for the foreseeable future, exports will provide the biggest opportunity for U.S. dairy producers over the next several years, especially in Asia, Africa and Latin America.
The latest Veterinary Feed Directive (VFD) Final Rule was issued in June 2015 by the Food and Drug Administration in response to the public perception that the use of antibiotics in animal feed may be leading to antibiotic resistance. The FDA’s new rules will eliminate the use of feed-based antimicrobials for improved growth and feed efficiency if the antimicrobials are considered to be “medically important” for humans.
The current global glut of milk powder, as reflected in the large and growing inventories held in the U.S., the EU, and New Zealand, has kept world milk powder prices depressed, with little hope of a meaningful recovery until at least 2017.