By SUSAN MYKRANTZ

Ohio Correspondent

WOOSTER, Ohio — The cow herd in the United States is getting better, according to Dr. Marin Bozic, assistant professor in dairy foods marketing economics in the Department of Applied Economics as the University of Minnesota.

He was a presenter at the 2019 annual meeting of the Ohio Dairy Producers’ Assoc. in Wooster, where he told the audience via distance presentation that dairy farmers in the U.S. are producing between 2.5 million-3 million more pounds of milk than the previous year.

“We can either eat more dairy products, export it, or reduce the number of dairy herds in the U.S.,” he said. “But the domestic population isn’t drinking enough milk to absorb the excess, and even exports can’t absorb the additional milk being produced presently.”

Bozic contends that free trade access is critical to a strong economy. Looking at the big picture, he said export issues are not about dairy – in fact, agriculture exports and especially dairy exports are a small blip on the screen compared to all exports.

He cited multiple factors that can potentially impact the export situation. First, China is heading toward becoming a full dictatorship, while at the same time U.S. officials are rattling their sabers and taking a tough approach toward China as the current administration, as rising adversary.

“From about 1945 until recently, Russia was our major adversary,” he explained. “When we were building an alliance with other countries, the United States accepted a weak trade agreement which allowed other countries to have access to our markets to bribe them to side with us instead of the Russians.”

Energy independence is another factor impacting the export situation. With the advances in oil and natural gas production, the U.S. is becoming a net exporter of these and no longer dependent on other countries to supply its needs.

The third factor is artificial intelligence; one in five jobs will be automated, according to Bozic.

“When it comes to trade, we need cheap labor, but we don’t have that anymore, and we have an aging population. Instead, technology is advancing to the place where we can make these products online or even as close as Mexico with a much smaller labor footprint.”

The consequences from these changes, according to Bozic, are that the United States stops being the world’s police. With the advance of technology, the U.S. will no longer need cheap labor from abroad and with the advancements of its oil and natural gas industries, the nation will no longer be dependent on foreign oil supplies.

As a result, Bozic believes the U.S. can be more aggressive and will no longer have weak trade agreements.

So what are the implications for dairy as a result of these changes? He believes the U.S.-Mexico-Canada Agreement trade pact will be ratified this year. “We may see a minor hiccup with Canada, but we should see tariffs removed in our trade with Mexico,” he said.

He also predicts the U.S. will reach a favorable free trade agreement with Japan and Britain, as well as possibly a short-term agreement with China for election purposes.

“I think we could see a global recession coming soon,” he said. “The demand for dairy could be impacted, but I think the U.S. may not be affected.”

In the long term, Bozic predicts that agriculture will see more market access – but it could be a rocky road.