Extreme heat stresses cows and threatens the global milk supply

Some of the world’s largest milk-producing regions are becoming less hospitable to these animals due to extreme weather conditions brought on by climate change: cows are not producing as much milk under the stress of scorching temperatures, and drought and storms are making the grass and other crops worse, that they eat wither or destroy.

In the US alone, some scientists estimate that climate change will cost the dairy industry $2.2 billion a year by the end of the century – a financial blow not easy to take from a sector that is already struggling to make money shoulder is. If greenhouse gas emissions remain high, one study estimates that the dairy and meat industries will lose $39.94 billion a year to heat stress by the same date.

At the same time, a growing middle class in many developing countries is driving demand for dairy products, while environmental protections are preventing farmers from expanding production in some areas. This collision points to higher prices and potential shortages of staples such as cream cheese or yogurt.

“Climate change is increasing volatility or swings in your supply, and the result can be increased food insecurity,” said Mary Ledman, global dairy strategist at Rabobank.

Cows under stress

Despite costly efforts to keep their cows cool, dairy farmers cannot escape the effects of heat on their herds.

Tom Barcellos, who has been raising and milking the animals in Tipton, California for 45 years, has a complex cooling system on his farm. Complete with fans and fog machines, it even plans downwind. But he finds warm nights can hamper production.

“If you have higher temperatures in the evening and it’s a bit more stressful for the cows, there’s a chance that in the most extreme cases, 15% or maybe even 20% will be lost,” said Barcellos, who has 1,800 cows.

The situation is similar on the other side of the world, where Sharad Bhai Harendra Bhai Pandya and his brother keep more than 40 cows in the western Indian state of Gujarat.

Pandya houses his livestock in a shed with a misting system that pumps in water and turns it into mist. But he still sees milk production on his farm drop by more than 30% during the sweltering summer heat.

Rising temperatures are likely to make such conditions a reality for more farmers and for longer periods. That makes difficult investment decisions.

Ranu Bhai Bharvad, a dairy farmer in India, doesn’t even have a shelter for his herd of 35 animals. His cattle have only the shade of a neem tree to ward off heat stress.

“I can’t afford to build a stable for my cattle,” said Bharvad, who supports his family of 15 with profits from his farm.

Bharvad is not an isolated case: India is by far the largest milk producer in the world, accounting for almost a quarter of all shipments. Its vast quantities are produced in large part by tens of millions of small farmers who keep modest numbers of animals.

Amul Dairy, which buys milk from Bharvad and other farmers like him, is responding to the difficult conditions by taking steps to secure supplies.

“In winter, when production is higher, we conserve extra milk [the form] of powder and use that defense in case of a shortage during the summer,” said RS Sodhi, the managing director of the Gujarat Cooperative Milk Marketing Federation Ltd., which owns the Amul brand.

Australia’s drought

Australia, the driest inhabited continent on earth, offers a preview of how the global dairy industry could collapse under the pressures of climate change.

The country was once a heavyweight in the business, but milk production has fallen sharply and its share of the global dairy trade has fallen from 16% in the 1990s to around 6% in 2018.

The reduction was fueled by a series of extreme heat waves, including a drought that lasted from 1997 to 2010 and another that spanned from 2017 to 2020. Livestock feed weighed on farmers’ bottom lines. These difficult business conditions contributed to a mass exodus from the sector: the number of dairy farms Down Under shrank by almost three quarters from 1980 to 2020.

Now, dairy farmers are still at risk of punishing the weather, but new pressures have been overlaid that are putting even more of them out of business. Australian milk supplies are projected to fall by more than 4% to 8.6 million tonnes in 2022, according to the US Department of Agriculture.

The USDA says this reflects arid conditions in key dairy-producing regions, but also challenges related to labor shortages, including some farmers choosing to switch to less labor-intensive cattle production.

Government policies could also end up weighing on global milk production. In neighboring New Zealand, the world’s largest milk exporter, farmers will pay a levy on agricultural emissions from 2025. Although dairy farmers have done a lot to reduce emissions, they still make fairly large greenhouse gas emitters due to necessities such as manure, fertilizer and feed production. Farm groups are raising alarms that the tax could force dairy farmers to reallocate their land to forestry or other uses.

French cheese

The challenges dairy farmers face are already affecting the availability of certain products. No premium cheese called Salers will be made in France this year. It has to be made from milk from grass-fed cows – a hurdle when pastures were destroyed when a heatwave swept the country this year.

While a lack of fancy cheese is hardly an emergency, similar production issues could shake the market on a larger scale amid extreme temperatures.

“If you’re talking about a five- to 15-year time horizon, we’re likely to see production spikes in water-stressed regions and then flatten out,” said Nate Donnay, director of Dairy Market Insight at StoneX Group Inc. “In the 15- to 30-year horizon we could see a lower production trend in these regions.”

All of this could mean higher prices or even shortages for some dairy products.

Melvin Medeiros, a farmer at top US dairy producer California, says extreme weather conditions are likely to transform farms in his state over the next decade. He anticipates fewer cows and less arable land — a dynamic he attributes in part to a lack of government intervention.

“We have failed to address a situation that has been occurring for over 50 years,” Medeiros said. “Now we have our backs to the wall and have no choice but to reduce production or do something about the current situation.”

–With support from Sybilla Gross, Diego Lasarte, Andrea Bossi, Vivian Iroanya and Megan Durisin.

(updates with details in paragraph 15)

Bloomberg