Impacts of the COVID-19 pandemic on the dairy industry: Lessons from China and the United States and policy implications

Abstract

The purposes of this study are to assess the COVID-19 pandemic's impacts on the dairy industries in China and the United States and to derive policy recommendations for enhancing the diary industries' resilience to pandemics and other market shocks. Specifically, data from the two nations are used to analyze and compare the mechanisms through which the pandemic has affected their dairy industries and to discuss potential lessons from their experiences. The findings suggest that this pandemic has heavily affected the dairy industries in both China and the United States through similar mechanisms, such as decreased farmgate milk prices, disruption and difficulties of moving milk within the supply chains, worker shortages, increased production costs, and lack of operating capital. There were also significant differences in the affecting mechanisms between the two nations, including transportation difficulties from widespread road closures and significant reduction in holiday sales of dairy products in China, and the shutdown of many dairy processors in the United States due to the closing of schools, restaurants, and hotels. While government financial reliefs are highly needed to help many dairy farms and processors survive this pandemic in the short term, the dairy industries and governments need to work together to develop long-term strategies and policies to balance the industries' efficiency and flexibility, product specialization and diversification, supply chain integration and local food systems, and market mechanisms and policy regulations and interventions.