This episode was recorded at the 2025 Western Dairy Management Conference in Reno, Nevada.
This episode was recorded at the 2025 Western Dairy Management Conference in Reno, Nevada.
Gregg Doud, National Milk Producers Federation, begins with an overview of his talk regarding recent and ongoing investments in the dairy industry. Dan Siemers, Siemers Holsteins, notes they were able to build a new dairy and find a new milk market because Agropur built a new plant in their area. Corey Geiger, CoBank, describes that the US is approaching $9 billion of new investment in dairy plants coming online through 2027, over half of that in cheese. High-quality whey protein isolates are in equal demand as cheese, so that has been a large part of the investment as well. He mentions investment in class one beverage milk and extended shelf life, as well as growth in yogurt and Greek yogurt. The panel also discusses milk in schools. (1:35)
Corey talks about the generational change on dairy farms regarding components. Dan mentions that in one generation, you can increase the fat percentage by 0.4 using bulls available today. The focus on pounds of fat and protein plus health traits has resulted in somewhat less milk. Dan feels that the industry needs to focus a bit more on pounds of milk as a carrier to get protein back in the business. Some plants indicate there might almost be too much fat, so a focus on protein pounds may be in order. (11:03)
Corey states that 92% of dairy farmers get paid on multiple component pricing, and 90% of that milk check is butter fat and protein. While some cheese plants don’t quite need all the butter fat that’s coming from dairy farms, it’s important to note that we are still not filling our butter fat needs domestically. There are definitely opportunities in the butter sector. The panel discusses some shuffling in domestic processing might also be needed to better use the sweet cream that’s available. (13:01)
Scott asks about export markets in developing countries. Gregg mentions that many Central American dairy products contain vegetable oil, so there is a lot of potential there. Corey agrees and states there is also similar potential in the Middle East and North Africa. He also notes that lack of refrigeration is still an issue in some parts of the world, so shelf-stable products are critical. Gregg mentions that drinkable yogurts are in demand in Latin America. (18:29)
The panel dives into the way beef on dairy has changed the industry. Dan notes the baby calf market has been a huge profit center, where the dairy can essentially break even and the calves provide the profit. This may be creating a challenge where a lot of dairies aren’t creating enough replacement dairy heifers. (23:16)
Data and how we use it is the next topic the group discusses. Gregg shares a story of an MIT grad who is developing an artificial intelligence algorithm to combine cow genetics with different diet ingredients and feed additives to decrease methane production while improving cow productivity. (28:49)
The panelists close out the episode with their take-home messages. Corey gives listeners a look at the impact of the domestic dairy market. Dan shares the sustainability story and climate impact of the dairy industry will continue to be important. Gregg is excited about new technologies, but asks for assistance in working with the federal government to get those technologies approved at the speed of commerce. The panel also discusses the impacts of tariffs on agriculture and how dairy farmers need to be communicating with their members of Congress. (32:56)
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Scott Sorrell (00:10):
Good evening everyone, and welcome to the Real Science Exchange, the pubcast where leading scientists and industry professionals meet over a few drinks to discuss the latest ideas and trends in animal nutrition. Boy, we've got a star studded cast with us today for this next topic. We're gonna be talking all things kind of dairy economy. Our first guest is Greg Doud. He's the CEO of the National Milk Producers Federation. Welcome appreciate having you here. Next let's see here. To my right, I've got Dan Siemers, he's the president, CEO and owner of Siemers Holsteins. Welcome. and this thanks Scott is not the first time that we've met, but so spent some time with you. I believe it was in Vegas. You don't remember? I do, but I enjoyed the time here, guys. You know what they say about Vegas, Scott, Scott, I know everything stays in Vegas. That's right.
Cory Geiger (01:06):
Pleasure to be here. And Dan and I actually have another connection. We both grew up in the same county, and that is where Dan's dairy farm is based out of. It's true,
Scott Sorrell (01:13):
For sure. Is that right? And what county is this? Manitou
Cory Geiger (01:16):
County, Eastern Wisconsin.
Scott Sorrell (01:17):
Eastern Wisconsin, awesome. Yeah. I love Wisconsin. Greg, why don't we start with you. You had a, gave a presentation I believe it was today here at the Western Dairy Management Conference in Reno. Yes, sir. Give us kind of an overview of some of the things you shared with the audience.
Greg Doud (01:35):
Well, I tried to do my best to stay with Cory here in his, his presentation that he gave yesterday, talking about the, somewhere between eight and a half and 9 billion in dairy processing and, and how to look at this industry going forward. The basic premise being not a dairy expert, but an agricultural expert and, and the chief trade, ag trade negotiator in the Trump administration that has looked at a lot of different sectors in agriculture for a long time is, I hope dairy farmers appreciate this investment in them that is being made by co-ops, by proprietary companies in the US by big farmers that aren't in co-ops. And a little bit from, from outside of the industry and outside the country today. I don't know of another industry. I don't know another sector of, of the ag economy anywhere in the world that has this kind of investment going on.
Greg Doud (02:31):
And it, it just really shows that when you look at protein, beef, pork, poultry, dairy in the world over the next 10 years who can expand and grow, it's pretty clear the expansion's gonna come here in the us. It, it can't, they're, they're shrinking in Europe. They're maxed out in New Zealand. The other places you go in the world, climate-wise, et cetera, you can't really do it. And everybody knows it. And it, and it's not anything really new other than now we're seeing these investments come online. The new Hilmar plant in Dodge City now is up and running 40%. So what does that mean? What does that mean in terms of what are we gonna do with this stuff? And, and from my perspective, I, I'm not an expert in the domestic industry, but I do understand the trade component of this and what I see coming on the trade side and, and helping people understand that, whether it's digesters or beef on dairy or cheese exports or whatever it is, it's gonna be
Scott Sorrell (03:24):
Good. Yeah. This
Greg Doud (03:25):
Industry's gonna be good. Yeah, you're in, you're in really good shape here. Let's go.
Dan Siemers (03:29):
Yeah. Well, and obviously that investment does so much for so many of us. As a dairy producer, we were able to build a new dairy and find a new milk market because, you know, egg Agri Pure built a new plant in our area. And, and that feeds all those jobs does so much for our business. So, and, you know, the banking community, everybody that's involved in everything that we do, so with, when that investment happens, it just, it just floods the economy with all good things. So it's it's tremendous what's going on and it's gonna keep our dairy economy vibrant for many years.
Scott Sorrell (04:07):
Yeah. Can you guys talk a little bit more, some of the specifics about what are some of those investments? You mentioned one, what others are taking place?
Scott Sorrell (04:22):
The economics of feeding reassure precision release choline reassure is fed during the transition period. And because it's fed for such a short period of time, it costs just $15 per cow. And yet the benefits will continue to generate income throughout the year. Cows fed reassure produce five pounds more colostrum, which pays for your reassure investment on the very first day of lactation cows. Fed reassure also produce five pounds more milk per day every day. That means after the first day, every day is payday invest and reassure during the transition period and recoup your investment on the very first day of lactation after that, you got it. Payday.
Greg Doud (05:11):
Well, I think Corey's the, he's the banker sitting over here. He knows the answer to this.
Cory Geiger (05:15):
You know, we're approaching $9 billion of new investment in dairy plants, and that's coming online through 2027 over half of that in cheese. And if, you know, the nursery rhyme, little Miss Tough had sat on our muffin eating or curds. And whe when you make cheese, you get whey. And with the weight loss drugs that are GLP ones and that whey protein isolates high quality whey protein concentrates are in equal demand as cheese. So that's two of the big drivers of this. And so that's been a big part of the plant investment. There's actually, you know, fluid milk is stabilized here in the 2024 data, and there's investment in that category. And when you see investment in class one beverage milk, a lot of that's gonna also involve membrane technology. So you're gonna see a lot more lactose free varieties. You're gonna see more of the fairlife products that have boosted with protein.
Cory Geiger (06:09):
And, you know, we have a part of our country here, dairy cows are throughout, in every state of the United States, but the southeast market is really milk deficit. And a lot of those plants, I say, are in a crescent shape if you go from Texas to Missouri, up to Ohio, New York, and and New Jersey area. And there's two in the heart of that Georgia and Florida. But we're gonna be looking to set plants up as an industry on that rim and move milk into that area, and also use technology extended shelf life. You'll hear the acronym ESL quite a bit. And so a lot of different dynamic innovation taking place in dairy. And certainly we're gonna see yogurt as a big growth category. Greg talked about that in his presentation this morning as well. And the Greek yogurt category, very high protein. Americans eat about half as much as the Europeans do, so we're gonna see growth in that area as well.
Scott Sorrell (07:06):
So how much of this investment of these new plants is that targeted to export? Much of it? Or are we still looking up for a lot of that to be consumed here? Well,
Cory Geiger (07:16):
Certainly in the class one beverage market, almost all that's domestic here, although there's some of that would be exported potentially out of Florida to the Central American countries. When it comes to cheese and whey protein, well, I would say over half of that's being developed to service the export market. Think of it as the more nutrient dense the product, the more opportunity is to export
Scott Sorrell (07:40):
It. Yeah. We had a a podcast earlier today with Dr. Torsten Hemi. He said there's by 2050 there's going to be a requirement for, for 450 million tons more milk. And his proposition was, so where's that gonna come from? And certainly, United States is positioning itself well, as you kind of mentioned before. So I'm just kind of curious if you guys share that kind of thinking and, and, and that kind of forecasting.
Greg Doud (08:10):
Yes. And, and one thing I would add to your comment about ESL, the, the ultra proce or ultra pasteurized products, that investment is in that crescent that you're discussing. There's a couple other things you can talk about here is schools. So one of the big issues that we're trying to fix in Washington right now is getting whole milk back in school at a Senate Ag committee hearing just yesterday about this. We know that we had a big positive vote on this in the house last year. We know we're gonna get that again. We think that if we can make this change to get whole milk, 2% milk back in schools, this really opens up an opportunity to have an industry where we have the potential to sell ESL milk in schools for, for really the first time. And, and that creates for the Miami, the Chicago's, the Atlanta's, the, you know, these, these bigger, Cincinnati has been a big, Ohio's been a big proponent to this. Okay. Does, does that satisfy the demand? Well, what if we can match that with selling that in the Caribbean or Central American countries as well? That really makes the whole business model hum in terms of a major investment and, and that kind of strategy in this industry
Cory Geiger (09:20):
And the legislation that Greg's talking about, why it's so important, the growth category in fluid, fluid milk in the most recent years has been all around whole milk. It's not been the other category. So flavors in the fat, let's get it to consumers hands and school children. Yeah.
Greg Doud (09:37):
And with the make America healthy again. Yeah. Deal there. There's no question that this is, that's
Scott Sorrell (09:42):
Gonna be part of it.
Greg Doud (09:42):
The the science is very clear and this is that fat and milk is not the same thing as fat and potato chips.
Scott Sorrell (09:48):
Yeah.
Dan Siemers (09:49):
Great points. Yeah.
Greg Doud (09:51):
And, and people understand this. The scientists understand this. The dietary guidelines need to be changed to reflect this. And so we've got a lot of momentum here. That momentum then you have, that's what we're looking at. Well, how does that translate into business models? Mm-Hmm
Scott Sorrell (10:05):
Yeah. Yeah. Milk's healthy again. Yes.
Greg Doud (10:09):
It always kind of has been.
Scott Sorrell (10:11):
Yeah. Yeah. Yeah. Imagine that. Yeah.
Dan Siemers (10:12):
It's always, it's kind of been a struggle though on the whole food pyramid to get that stuff all done the way that we've wanted it to from on the dairy side. So that'll be the next, the next opportunity for us to see if we can't get some of some of these recommendations done. Oh,
Greg Doud (10:27):
There's been so much work on and so much investment in all these alts, you know, the alternatives and, and you see how that has turned out is that consumers just don't go for it there. It doesn't taste well. They don't like it. Yeah. They drink some of that stuff some of the time. We've got a better product. We know we've got the better product now. Now it, and that's the point of the dairy industry is, I'm just trying to emphasize now is our time. We, we, we have got this thing swung in our direction here for the first time in, in decades, let's go.
Dan Siemers (10:59):
People like real, real is real and fake is fake.
Cory Geiger (11:03):
When we talk about the plant investment. And earlier this week, the council on dairy cattle breeding had a meeting here, and Dan was on that panel. One of the, we're we're talking about plant investment, full fat, nutrient dense dairy products. And the, the revolution, the generational change that's been happening on dairy farms has been components. And Dan's lived at, when I think of dairy producers across the United States on genomics and genetics Dan is certainly in the top cream of the crop there. And I think he has a lot of insight on what's changed on his farm and what he's shipping to his processing plants. Well,
Dan Siemers (11:39):
It's, it's crazy. And that, and that's the entire country as far as especially fat protein is, is gaining momentum as well. But especially fat. We use bulls now that in one generation you can increase fat percentage by 0.4 almost a half a percent of of fat in one generation. It's been something like, and, and we have our genetics business and, and the formulas really to, to say thank you for that because we focus more on pounds of fat and pounds of protein now and to get health traits and have that it, it's meant somewhat less pounds of milk to, to get everything else together. Now, of course, I think if we're gonna try and get protein back in our business, we're gonna need milk, more milk as a carrier. And, and, and to focus on that, again, because, I dunno, I I, from what I've seen, we might be getting to the point with some of these plants that there's almost too much fat right now. We're gonna have to think about that and balance it. Again, fat's been a great story in, in dairy, but right now, the cheese plants, it's hard for them to get all the money out of the marketplace trying to move that fat. So it might be a game of ketchup that they need to figure out where it has to go. And, and, and maybe it's logistics, but I also think that we're, as, as the, the dairy community is gonna have to focus a little bit harder here for a while on protein pounds. Yep.
Cory Geiger (13:01):
Protein is certainly gonna be a driver. The, you know, as this industry evolves and change, there's a lot of opportunity here. I think that's a central theme that we're talking about. So dairy farmers are responding. 90% of the milk check comes from multiple, or excuse me, 92% of dairy farmers get paid on multiple component pricing. 90% of that milk check and multiple component pricing is butter, fat, and protein. So while some of our cheese plants are dealing, they don't quite need all the butter fat that's coming from the dairy farms, but there's a big BUT I'm gonna put in there. But in 2010, the United States imported 10 million pounds of butter, not a whole lot. By 2020, we imported a hundred million pounds of butter in anhydrous milk fat, which you'd use to make ice cream and butter and sour cream. And last year it was 172 million pounds. So there's opportunity. We, while we have made, we're making record amounts of butter fat in this country, we are still not filling our needs domestically on butterfat. On the flip side, when you look at our exports, we're basically keeping our butterfat in this country and exporting skim milk sage, which is protein. So we have a lot, I don't wanna call it retooling, but we need to find especially opportunities in butter.
Greg Doud (14:21):
So, so I would make two points with that. I'm glad you brought up the butter thing. 'cause This is something that is really how fast this has changed in butter
Cory Geiger (14:29):
Big time,
Greg Doud (14:30):
Just in a couple years, is, is really, you know, it's a market signal that is, is not something we're used to seeing. What I'm really excited about, and it, and it's very fortuitous, Corey, is that we've got the fed changes in the federal milk marketing order coming in terms of components. And all of this couldn't finally, after 25 years of this, couldn't happen at a better time because that too will allow the market to send the signal back to dairy farmers. Is this is what the market is demanding, this is what we need to do more of.
Cory Geiger (15:00):
And I wanna come back to what Dan said and turn it back to him. So the story on butterfat, there's a lot of different puzzle pieces on the table of the United States that we gotta shift around to get this to go. 'cause You can't ship sweet cream, which is really the excess butter fat from a plant, long distances. 'cause It fat globules are a little sensitive. So we can change butter fat quickly, not only through genetics, but feeding when it comes to protein in dairy, it's a lot more genetics. And so you have maybe a few less tools in the toolbox. And I think that's where I come back to Dan, what he was discussing, where we probably do need to double down on protein, given the market trends on consumers.
Dan Siemers (15:41):
Yes. I, I totally agree. And it's a situation in the genetics world where you wanna skate to where the puck's going and not where it's been, and look out the the, the windshield and not the rear view. And and, and, and for those of us that are in that business, it's all about protein. And that's, that's for various reasons. It's not like fat isn't important because we're gonna retool and make some investments and figure out where to go with that fat and and, and make sense of all this. But in the in the cheese world which upper Midwest, we just have to maybe find another grassland, another butter manufacturing plant to be able to use all that sweet cream.
Greg Doud (16:21):
And overall globally, when you look at the marketplace, the dome domestic demand for butter is gonna be unbelievably strong. You've talked about the imports on the protein side, though, we've got all kinds of opportunity in the inter international marketplace. We've, we've barely scratched the surface. And, and so we, to your point, Corey, we've gotta figure out how to shuffle things around from a domestic processing standpoint. We've got a lot of money coming in doing this right now. There'll still be pockets and places around the country where we'll have to, you know, change some processing around to balance that. We don't know what that'll look like next. And, and I, you know, in the conversations we've had here, and I've had just in the last year I've been in this job. I'm from north central Kansas. I grew up 15 miles from the Nebraska border.
Greg Doud (17:09):
You, you look at the milk we're making in the Texas panhandle, southwest Kansas, South Dakota, you know, there's a big gap there between western Kansas and eastern South Dakota that doesn't have a lot of milk production today in Nebraska. That is the next frontier I would predict coming from the old cattle guy here and knowing what they can do in terms of cattle feeding in that part of the world that'll be the next frontier in terms of processing investment in dairy investment as well. Is is that, is that whole right down the center of the country evolves.
Dan Siemers (17:43):
I know exactly what you're saying. We when we expanded, we bought a herd in that area, and I couldn't believe that huge open area that basically had no dairies.
Scott Sorrell (18:05):
Yeah. Plenty of water there.
Greg Doud (18:06):
Plenty of water there. Plenty of water. Plenty of forage there. Yeah, for sure. And, and so that's, that's the challenge in Texas is, is the water situation. Yeah. You get into southwest Kansas, they can grow the forage. They're gonna need to import the corn. Yeah. When I say import, I mean from Nebraska or Iowa. Right. but as you go up into Nebraska, they can do all of it. Yeah. And, and so it's just a function. What do they lack? They lack the processing.
Scott Sorrell (18:29):
Yeah. Yeah. Interesting. So we had a discussion order earlier today. Going back to the protein conversation, these developing countries. If, if milk stays cheap enough and milk components stay cheap enough that's where a lot of this growth is gonna come from. The
Greg Doud (18:46):
US Dairy Export Council has, is really doing a lot of work here. And the question is, we're watching China and saying, you know, China's been a little disappointing. I think even the Chinese would tell you they've been disappointed in dairy consumption in China. But if you look at, we've looked at places like Central America where for the first time on January one of this year, we finally got to zero tariff after 15, 18 years of, of working it down incrementally. What's really interesting about that part of the world is so many of the dairy products have a lot of vegetable oil in them still. The, the cheese, the butters, et cetera, they're not all dairy. It's not a really good product if we can really work with them at a price point to get real whole dairy products in there. From a butter cheese standpoint, I, I think the potential is enormous for us to expand.
Cory Geiger (19:36):
I and Greg, what Greg brings up, I think in America, we, for we don't appreciate that for the most part, Americans are rather blessed with their incomes. I mean, we have things we talk about as a culture and a society, but in travels around the world, when you go to the MENA countries, middle East, north Africa, or you go to Vietnam, which is another good customer of us consumers, a woman that will work two weeks to buy a can of whey protein isolates, which is baby formula, because she wants better for her child than that generation had. So dairy's very valuable. But to make some of this economically available for adults, not necessarily infants and toddlers, they do do mixtures. Some things will use palm oil, some will use the vegetable oil. So you kind of got a hybrid. It's not necessarily a dairy product.
Cory Geiger (20:29):
And so that's the other opportunity. And US Dairy Export Council, places like Laprino, dairy Farmers of America and others have research centers over in Southeast Asia because we need to be there. We need to let them work with our dairy ingredients from the US because what looks a pizza looks like in Japan is completely different here. I, I'm pretty sure Dan wouldn't, and I wouldn't sit down and have squid or octopus on our pizza, but you know, in Japan, that's, that's go to. And so we need to make those products the way they want. 'em, They
Dan Siemers (21:01):
Probably even like anchovies,
Greg Doud (21:03):
Yes.
Scott Sorrell (21:03):
They're, they're having a lot of yogurts and those kinds of things, I believe. Right. They're easy to store and package. Yeah,
Cory Geiger (21:09):
They are. Well, and excuse me, refrigerations are is issues at certain parts of the world, yet we take that for granted. So we do need to make shelf stable products. I mean, why did why did Vena milk in Vietnam put up the most modern fluid milk processing plant about seven years ago? And make ESL milk before we even really thought about it here, because they, they wanna move it across the country and not have to refrigerate
Greg Doud (21:36):
It. Another key point on that is, is in Latin America, enormous demand and huge growth in drinkable yogurts. And where that's interesting is that you have, you know, a a decent domestic dairy industry, but they can import our solids, our protein, and really make something that consumers really like. And, and so the industries are, you know, we can actually work together here to make the pie bigger, to grow both sides, you know, that that improves the dairy industry there. They expand, adapt technology. We can bring in products from what we're doing. We're you know, it all works together to, to help consumers.
Cory Geiger (22:16):
So take our best international customer, Mexico, that country in the last 25 years has grown milk production each and every year. And it, this is a perfect example of a rising tide Lifts saw both. So their, their domestic dairy farmers are growing their industry, but the demand for dairy is growing so much that the growth in exports from the United States to Mexico continues to grow. And now 85% of their imported products comes from our country because consumer demand is improving. 'cause Consumers have more money and they want better higher protein diets. Greg, earlier today said, I, I am gonna get, I'm gonna paraphrase this wrong, so correct me, but I wanna walk our grain off our farms on four legs,
Scott Sorrell (23:00):
Dan Siemers (23:00):
That's a perfect way to put it.
Greg Doud (23:02):
Yeah. Yeah. And the the other one I use in, in other audiences though, is we have to remind people that I grew up on a hog farm, not a dairy farm in Kansas is pigs and chickens are not pigs and chickens. They're little walking piles of corn and soybean
Cory Geiger (23:16):
If, if we're talking about animal protein here, maybe if we turn the conversation a little bit to certainly another gen generational change beef on dairy, and I know Dan has a very high end genetic herd that's top in the country, but talk about how you've seen that on your farm and from your eyeballs, this whole metamorphosis.
Dan Siemers (23:39):
It's changed the industry there. There's no doubt, because if you look at average profits on, on Hertz, right? And, and there's a lot of dairies. If you know Cory, you're a banker, you know that the average dairy pretty much is $800 a cow of, of net per year, right? So now let's talk about 900 or a thousand dollars caps so it, the rest of the dairy can almost break even. And the profits really coming from those baby calves. It's it's crazy to think about it that way, but that's almost where what we've gotten into. And we've had several presentations here at the large herd seminar talking about the correct formulas or how that we should figure how many calves that we need for replacement values. That's got, that's, that was a, a big topic here this week because probably a lot of dairies aren't figuring, aren't using aren't making enough heifer calves, but this beef business and the length of time it's gonna take to make to catch our beef up to the demand, the demand for beef is just unbelievable. And how that we get that caught up and how long it's gonna take, it's it's, it's really something that's quite a story.
Greg Doud (24:47):
So as the former chief economist for the National Cattleman's Beef Association, a partner in a cow ca I'm the beef guy, have been in in for a long, long time. Here's the point I wanna make on this. This is gonna be good for quite some time to come. I get this question a lot as well. You know, we've had a lot of beef guys get outta the business. They've seen it spike. They want to get out while the good's good. We've got at least 3, 4, 5, 6 more years of this ahead of us. And that is just because of, of the weather situation. Everything we have going on on beef. I'd love to, we'd love to expand our cow herd in Kansas. We can't because of dry weather, et cetera.
Dan Siemers (25:23):
So how do the processors end up being able to handle this many years of boom times though? Because there's a lot of times that those guys are in the red on the box beef and I, and I don't know what it takes to fix that. Maybe that's not for today, but it's certainly an, an issue when you talk to the beef processors. How, how that, you know, where, where that that cutouts versus boxed beef is. Well,
Greg Doud (25:45):
This is the whole, goes back to my, the first thing we talked about here today. Look at the investment in dairy and the new money and processing going in. You look on the meat side of the equation, beef, pork, poultry, they're just trying to stay alive. They're trying not to close. There's no money being spent in expansion like that anywhere on the meat side of the equation. And in fact, if we hadn't had beef on dairy, it would've already closed on the beef side
Cory Geiger (26:10):
And on on the dairy farm. If you look at the numbers from the National Association of Animal Breeders, so if you go back to 2017, 2013 is kind of when this movement started. And in 2023, US dairy farmers bought 7.9 million units of beef semen record high and 2024. That number flatlined for a very good reason, because two years ago, you could have your choice and privilege of that replacement at $1,600. And now you couldn't, you can hardly sniff 'em for double that money. So what happened last year in the data, us dairy farmers move from 8.4 to 9.9 million units of gender sorted semen. 'cause That people like Dan are realizing, especially if you're growing, I gotta make my own replacements 'cause I'm not gonna find 'em in the countryside. So we got two products, sex sorted dairy and beef semen, which will probably become mail sorted beef, but
Dan Siemers (27:02):
Go ahead, then probably will. But that is, that is the story in the countryside. So the the bigger dairies that are that are internally sourcing they, they're looking at their numbers all the time, and that's the speed at which they grow because it's just too hard to go out in the countryside and get these bought. And that's, that's kind of been the story for expanding dairies, is what do your heifer pens look like? What can your heifer pens tolerate for milking strings? And and it's, it's different than what there's been, Greg, you just said the changes in the last two years, the changes in the last two years are just mind boggling on almost all assets of, of all things animal agriculture. It's been phenomenal. Yeah, it's,
Scott Sorrell (27:41):
You used to have too many heifers not too long ago.
Dan Siemers (27:43):
Well, exactly. And, and and now with the beef thing, I, I don't know when that this changes. I, I, I think we're in a long term trend. And of course, you know, as soon as everyone starts thinking you're in a long term trend, you're not in it anymore. That's kinda how it works. Well,
Greg Doud (27:57):
And, and where this trend to me is the most remarkable on the beef side is if, and I've said this many, many times in many crowds, if you would've told me five years ago that we could have taken that stake in that restaurant from 30 to 40 to $50, and not whacked demand hard, I would've told you, you're crazy. Look at the demand side of the equation. We're at a $50 stake and we're just still pumping them out. It is. And that's where that money's coming from to drive all of this that we're talking about. It's the consumer.
Dan Siemers (28:26):
And that great part of that story is quality has come a long ways too. Oh my goodness. You know, you when's the last time, I can't remember the last time I had a bad steak experience, and, and when we were kids,
Greg Doud (28:40):
That black calf coming off of that dairy is certified Angus beef, for goodness sakes, remarkable change in the industry in a very short period of time.
Cory Geiger (28:49):
You know, sometimes, certainly a podcast like this, you wanna kind of look over the horizon A couple times in my days at Hoards Dairyman and now at CoBank, I've been invited to speak to beef nutrition companies and that, and one of the things we talked about, Angus certified beef, I, I think there's an opportunity for dairy long term. I certainly believe in the data's out there that the dairy cow is the most studied animal on planet earth. We have more genetic information, we have more phenotypic information now we're making a pretty homogeneous product that gives the consumer very repeatable, good experience. And we have more tracking of the dairy animals than we do in other livestock sectors. Well expect beef, I won't go into hogs, so there may come a time that dairy could have its own certified fill in the blank product here too, because there's a, there's just a lot of opportunity when you go to Japan. You scan a QR code, and I know right where that steer came from and it could even have been America. And so there's so much more possibility yet.
Greg Doud (29:54):
Well, and so I'm gonna combine three things here that we've talked about today. Fir first is the nutrition side of the equation and, and what we're doing there. You have a PhD ruined nutritionist as a consultant, I'm just guessing.
Dan Siemers (30:06):
Absolutely. I mean,
Greg Doud (30:06):
Of course then on the veterinary side of the equation, and, and what is amazing to me, as you go into these big rotary dairies and the count walks off after all her data's been downloaded, and if she has so much as a sniffle, one door closes, one door opens, and the vet's standing there with a book saying, okay, I got exactly what's going on here. That's
Dan Siemers (30:24):
Exactly how it works,
Greg Doud (30:26):
Works. It, I mean, we're, that's again, is a big change. So you, you combine the nutrition with the, the vet side of this. And then the final piece of this that I see coming that's, that's gonna come in with this is the data analytics piece. The data that we have. Now, let's figure out, you combine this with the genetic side of it. Let's, let's figure out what we're doing. So I'm gonna give you a little tip here. What's interesting, a company that I'm watching, I was actually part of a shark tank,
Scott Sorrell (30:52):
Is that right?
Greg Doud (30:53):
Of, of a, a venture capitalist that invested in a company called Metha Do ai. Have you heard of this company? I
Dan Siemers (30:59):
Have not.
Greg Doud (31:00):
It's an Israeli, young Israeli guy that went to MIT. It is a, he takes the genetics of the cow, and then he takes the feed that they're using and he's building an artificial intelligence algorithm that says, okay, now I can look at Bovar or Rumensin or whatever seaweed it is, and I can increase, I can decrease my methane by 20%. This is what he's told me. And he's, he's working with Hilmar and other folks. Now, everybody needs to know about this guy. Yev is his name. He is really smart. And he's like 30 some years old. I can in decrease methane, 20%, I can increase productivity 7% based upon what he's done so far. And all this, what he's told me too is he said, and, and if you don't get these ingredients, so he's combining ingredients. It's, it's like a linear program kind of thing that he's doing. It's a
Dan Siemers (31:49):
Predictive model. Predictive
Greg Doud (31:51):
Model. And he said, and if you're not doing it right, he said, I can really whack my productivity.
Dan Siemers (31:57):
Of
Greg Doud (31:57):
Course. And, and so that's what I, the final piece of this is the data and, and being able to figure, you know, these people that come in and say, well, I can help you. This is exactly what Doge is doing, Elon Musk is doing in the federal government right now, is I can analyze the data and figure out what we're doing wrong really quickly. We're gonna do this in the dairy industry.
Scott Sorrell (32:16):
Well then, as we kind of close out, what I'd like to ask each of you guys to do is just kind of share some final summary thoughts with the audience. Some come some key takeaways that you think they ought to take from the conversation today. Corey, would you mind starting us off?
Balchem (32:30):
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Cory Geiger (32:56):
I would, you know, we have some great opportunities in the export market, and we've really talked about those on the podcast, but we cannot overlook the domestic dairy market. I mean, it's our bread and butter, pun intended. A year ago we sold, if you look at Rcna data, 74 billion, excuse me, $76 billion of dairy products. Dairy is the largest space in the grocery aisle. And it's reason, it's in the back of the store because grocers wanna pull consumers through and get 'em the dairy case. In the past year, in 2024, that number has gone to 78 billion. So there's a lot of the dairy, US dairy market is growing too, even, but the world is turning to us that investment at $9 billion plant investment is happening here because other processors, domestic and international believe that the US dairy farmer will respond and deliver more components. And components have been up 27% since 2010, and fluid milks has been up 15%. So these market dynamics are take taking place in dairy's dynamic and growing. And just to put that $78 billion perspective, if you put all the beer and the liquor and the wine combined, they don't even match dairy. And that's, that's phenomenal data. Interesting and perspective on our industry.
Scott Sorrell (34:13):
Yeah, interesting. Dan, you got a few comments for us? Well,
Dan Siemers (34:17):
One thing we didn't get to talk about much is the sustainability story around animal agriculture. And one of those things is certainly the capture and, and harvesting of the methane. And I think the digester industry, that whole part of it, 45 v everything that we're trying to get accomplished on that side. It's a really good story to tell in the dairy industry. And I think that that's probably something that is gonna need to be brought forward as there's more, more and more climate conscious people. And we talk about what that that technology can do for our planet. I think that that's something that we can be all excited about where everything else is going, but there's a lot of people that view animal agriculture through the lens of what's great, but how's it affecting our planet? So I think we're gonna have to do, we we have a digester. We just got into that I I spent a lot of time working on that, you know, for anybody listening that wants to learn more about that or, or the different ways that you can make that work, I'd be happy to to talk with them because I think it's a great story that we're gonna need to keep telling.
Scott Sorrell (35:24):
Yeah. Well, you know, along those lines, perhaps we can do a separate podcast on, on just that that topic sometime here in the not too distant future. So let's stay in touch and, and work on that. Sure. Thank you. Alright, perfect. Greg, final comment,
Greg Doud (35:38):
Final comment is I need your help in Washington. The the challenge that I see in Washington is we have all this money that is spent on our advantage in US agriculture is technology. This, this is our thing. And, and where I ended my speech here is, is, is a point I've made when I was in the private sector working with all these startup companies in agriculture and this new technology digesters 45 v tax credit side of the equation. But my big cha, what I see that we need help on is companies are investing in us, but if the US government and our regulators, the Food and Drug administration, et cetera, doesn't approve this technology, so we can commercialize it so the people that made an investment can get a return on investment, what's gonna happen? They're gonna go somewhere else. They're gonna go to a different country, different industry to get that return with the technology that they have. And we're gonna be sunk. We have got to help our government understand that you have got to approve this technology for us at the speed of commerce. They're falling down, they've gotta pick up their game. We have all gotta be chirping at the administration and at our members of Congress about this fact that, that this is our opportunity. This is our time, but this is, this is the impediment. This is the, where we get the pi, the pinch point here is getting this approved by our
Scott Sorrell (36:59):
Government. Yeah. You know, one topic we, we we failed to touch on real quick here, and we, we can we, we can kind of bring this back into the conversation, but it's tariffs and what impact do we think that they're gonna have on our business near and maybe longer term?
Greg Doud (37:17):
So we, we saw what happened today in the announcement, and I know there's been a lot of fussing with Canada and, and, and really in my opinion being very heavily involved in this a few years ago, but not being involved now, was, I just don't think there was a very good relationship there between Trudeau and Trump.
Scott Sorrell (37:34):
Yeah.
Dan Siemers (37:35):
Yeah. 'cause There, there really wasn't all that much of an argument for us to go after them as hard as we did. It just seemed like we were Yes, exactly. I
Greg Doud (37:43):
Think that's what that was. And, and so he was trying to make a change there and, and yeah, he got that change done. All right. But there's a lot of, you know, a lot of other stuff there. Well, the announcement that was made today is that Canada and Mexico are exempted from the 10% tariff, et cetera. So I think there's an acknowledgement now that, okay, we've had a frank conversation with our closest allies and, and, and trading partners here. This is gonna get interesting now with the 10% tariff, the 25% tariff on autos, and you know, especially with the Chinese, I I think there's a lot of frustration and, and, and working with China, I know there's gonna be, has to be more conversations coming with the European Union on all, all this. The key point I would make on all of this is this is not, you know, we, we typically think of government as making a static decision and then don't change. President Trump is a businessman. He's not a politician. I can guarantee you one thing, 24 hours from now, this will be different. There will be changes another 24 hours
Speaker 6 (38:47):
Need a date, date stamp this on
Greg Doud (38:49):
Exactly second here. Exactly. This will be a constant evolution. And, and so what you can do though is on, on this issue, on the immigration issues, on, on all the tax issues, is you've got, every dairy farmer in America has to have that relationship with their member of Congress, their senator, and help them understand in real time, you see that decision that was made in Washington yesterday, this is how it's affected me on that farm. Have that conversation with your member of Congress to help them be able to adjust and, and help our government move in real all time as well. That's the best advice I can give anybody.
Dan Siemers (39:22):
Gone are the days when a farmer could just be a farmer. It's not now, now, nowadays, you have to be thinking about all those things and you have to be able to be politically active and
Greg Doud (39:30):
Don't assume that you have a farm kid as the ag staffer for that member of Congress that understands what you're going through because
Dan Siemers (39:38):
He doesn't. Exactly. You know, Greg, you said something interesting today in your presentation. You talked about Europe standing in the agricultural world and and how that we're gonna be eroding into that and that could be the next big area of, of of opportunity for us.
Greg Doud (39:53):
W well, okay, so I, I had an opportunity last minute to come in and give a, a key address at the USDA Outlook conference. And, and the thing that I said about Europe that, you know, I refer to the Farm to Fork initiatives, the Farm to Empty Fork Initiative, and you know, the farmers over there aren't very happy either. But I will, I will all just say this is, if I say anything nice about the European Union and the folks in Brussels, I will have misspoken
Scott Sorrell (40:16):
Greg Doud (40:17):
How's that?
Dan Siemers (40:18):
It's funny. That's funny.
Scott Sorrell (40:39):
Absolutely. With that gentleman, that's a great stopping point. I want to thank you guys for joining us today. This has been an awesome discussion. I could hardly keep up. I'm gonna have to go back and listen to this at least twice,
Balchem (41:05):
We'd love to hear your comments or ideas for topics and guests. So please reach out via email to anh.marketing at balchem.com with any suggestions and we'll work hard to add them to the schedule. Don't forget to leave a five star rating on your way out. You can request your Real Science Exchange t-shirt in just a few easy steps, just like or subscribe to the Real Science Exchange. And send us a screenshot along with your address and t-shirt size to a h.marketing at balchem.com. Balchem’s Real science lecture series of webinars continues with ruminant focused topics on the first Tuesday of every month. Monogastric focused topics on the second Tuesday of each month, and quarterly topics for the companion animal segment. Visit balchem.com/realscience to see the latest schedule and to register for upcoming webinars.