Why are the dairy farmers concerned?
The COVID-19 pandemic has appeared as a global threat as this virus has affected almost all the countries and infecting human in an unexpectedly rapid rate. Every government has been taking the highest level of precautions and investing all possible options for safeguarding their own people. The outbreak of this virus was first detected in Bangladesh on March 8, 2020, and people are getting panicked day-by-day.
Bangladesh government has taken the topmost priority to decrease the infections and saving millions of lives. Against this, it might be too early, but it should have similar importance to think about the consequences of the coronavirus on other issues for the economic stability of the country. Diary sector of Bangladesh is a promising sector which has been contributing to economic growth. Proper attention should be given to this sector to trade off the economic loss of the dairy sector due to coronavirus outbreak.
The dairy stakeholders have a double burden than people who do not have dairy cows. Since millions of dairy farmers are engaged in dairy farming for daily livelihoods, it is of paramount importance to realise the effect of this virus not only to human health but also on dairy cattle. Considering this purview in mind, Integrated Dairy Research Network (IDRN) of the Department of Animal Nutrition, Bangladesh Agricultural University, Mymensingh has taken initiatives to analyse the impact of coronavirus on dairy farms along with alternative options that need to be taken by the dairy farmers for saving their own lives, dairy cows and dairy farms.
Does COVID-19 have the ability to be zoonotic?
The answer is "no" which is pleasant news for the dairy farmers as they might feel relaxed to handle their cows during this crisis. The coronavirus, which is a modified strain of the SARS virus – a virus that had strong zoonotic potential as the first patient of SARS-COV had contact with the animal. The Wuhan strain of coronavirus in humans is a relatively new challenge. Utilising the expert opinion from the North Carolina University of the USA, it is argued that there is no chance for dairy cattle to be affected with the one that has been affecting humans. At the same time, veterinary epidemiologist of Texas A&M University of the USA reported that coronavirus is not new to livestock and poultry which pose a positive message for the dairy industry in Bangladesh.
The experts from the USA also argue that wildlife (bat, rat, civets and pangolins) in China may be the carriers of human strains. The current COVID-19 outbreak has also been suspected of the bat as the carrier. The World Health Organization has reported that while the coronavirus MERS-CoV is known to be transmitted from camel to humans, other coronaviruses (e.g., COVID-19) circulating in domestic animals have not yet infected humans. The dairy industry has been passing a turbulent situation since July 2019 as a result of the milk quality crisis. The outbreak of coronavirus (COVID-19) has been added as an additional threat which might have an impact on the overall economics of the dairy industry. This needs to be considered for reducing the economic loss in the subsequent time (during and after corona stress).
Impact on milk production and milk price
Despite the increased demand for products as consumers stock up shelves for potential quarantines or to limit their trips to the grocery store, keeping up with that demand and securing the supply chain has not been an easy feat. With more travel restrictions in place because of the potential risk of spreading the diseases, export both to and from China have been impacted, hurting the positive trajectory that dairy was on globally. The viral outbreak, thus, is a potential hurdle as this might have a negative impact on China's import from the USA and other milk surplus countries, which will lead to increase the milk stock in the major exporting countries, thus, will have an impact on reducing world milk price in the long-run. Although there is no risk for the dairy cattle with the current outbreak of the coronavirus (COVID-19), a strong economic consequence on the dairy sector and dairy farms are expected, until adequate measures are taken in the right time.
With total milk production of 9.92 million tonnes in 2018, the dairy sector of Bangladesh has been focusing on the ways to become self-sufficient. The sector has been facing challenges, starting from milk quality scandal during the second half of 2019. Combined with the pandemic, the milk quality crisis has now doubled the effect. The IDRN, BAU research wing has made an in-depth analysis of the possible economic loss at the dairy sector and farm level. The analysis includes the year 2018 as the base year (normal year). The analysis shows that the year 2019 has milk quality shock and 2020 (first three months) has coronavirus shock.
A trend back and forecasting analysis on the reduction rate of milk production was done using the DLS milk production data and utilising the International Farm Comparison Network (IFCN) dairy sector modelling approach. The results show that the milk production is slowed down already in 2019 as the expected milk production in 2019 would be 10.47 million while our modelling showed only 10.22 million (a decrease of 0.25 million tonnes). The same is expected to happen in 2020 as the first quarter (January to March) of the year 2020 (especially during the month of March – after the coronavirus infection is detected), the predicted growth is expected to be declined from 5.5 percent to 2.1 percent which is equal to 0.76 million tonnes of milk. In 2020, the milk production growth rate in Bangladesh is expected to be much lower than in 2018 due to the existing effect of milk quality issues as well as COVID-19.
At the same pace, the milk price, a key income source, for the dairy farmers, expected to be decreased. The milk price in Bangladesh is always fluctuated due to any event. Historically, the milk price had different shocks compared with global milk price that are stated as below:
- The first shock was observed (Bangladesh milk price was 20 percent lower than world milk price) in 2008 which was affected due to worldwide economic recession and melamine crisis in China.
- The second hit on the milk price was found in October 2011 (10 percent lower than world milk price) due to the outbreak of Anthrax in the main region of the country.
- The third milk price crisis (16 percent lower than world milk price) was evident at the end of 2014 due to the internal political instability and General Parliament Election without main opposition leading to several strike days.
- The fourth milk price shock was again found in January to March 2015 (7 percent lower than world milk price) due to the long-lasting countrywide strike (90 days).
Given this historical milk price development, may we expect another price shock in the near future due to COVID-19 pandemic? The evidence of the impacts from the pandemic is largely anecdotal at this stage because no data is available on Bangladesh's dairy sector. Moreover, it is too early to analyse the impact but our worldwide experience and countrywide long-term modelling effect shows that there would have milk price effect in Bangladesh as a result of a decrease in global milk price which was reported by world-famous Rabobank.
Linked with the milk quality crisis in 2019 which affected more on the milk marketing and farmers had to spill over milk to the street although milk price development was unaffected, the other immediate economic effect will be on the loss due to not marketing milk by the farmers which will lower the milk price. Considering milk production decrease of 16 percent and milk price reduction of 22 percent into our model based on the DLS data, it is found that due to COVID-19, there would be a chance to incur a loss of Tk12,320 crore by the dairy farmers of Bangladesh. This implies that each day farmers are losing about Tk33 crore.
In conclusion, the most positive things for the dairy farmers are that COVID-19 infection is expected to have no direct health hazard on the dairy cows and its products. So consumption of milk might be unaffected, the farmers can even use this as an opportunity for utilising the milk production to increase the demand. In contrast, due to the limited movement of the people for the next two weeks, there could be short term effect on milk marketing and price might be lowered. The production could be decreased as well if the sufficient measures are not taken in due time. Since the dairy farmers have faced trouble in 2019, and again is in front of another challenge, it is highly recommended that the government, main dairy processors and other input suppliers and policymakers might take responsible actions to minimise the economic loss by the farmers due to the current coronavirus infections. The immediate actions could include as below:
- As a short term, dairy farmers have to continue their normal management practices but with great care. Cows and other herds should be provided with sufficient drinking water and also green grass. If milk selling and delivery to the processor is not possible, the farmers can reduce the cash costs by reducing the purchased feeds (e.g. concentrates). This will reduce milk production for a short-term but maintenance of the animal will not be hampered. As a result, when the normal condition will come, the cows can get back to the original potential for milk production.
- At the same time, the government should declare the liquid milk supply chain similar to the other food items (as emergency goods). The top processors like Milk Vita, Arong, and Pran should continue their regular intake of milk and take additional effort to fully utilise their powder processing plant by the collection of some extra liquid milk.
- It is quite interesting that liquid milk can contribute to increase the immune homeostasis of the humans (especially with oropharynx and upper respiratory tract). The review research article published in "Frontier in Immunology (Volume 9, article 143; year: 2018)" clearly revealed that cow's milk has immunoglobulin (IgG) which is helpful against the bacteria, virus and allergens. The function of IgG is enhanced with vitamin A and D3 – both are present in milk, therefore, it can be speculated that cow's liquid milk may influence the development of the immune system in the upper respiratory tract.
- More emphasis should be placed on the awareness or campaign to the people to drink milk which should improve the immune system against coronavirus.
- Finally, the government, at this stage, has taken right decision to make all efforts for ensuring the safety of humans first but in the long run, it needs to make judicious decisions targeting the ways to overcome the current and anticipated future loss.
*The author is a Network Coordinator of Integrated Dairy Research Network and an Associate Professor and Head of Department of Animal Nutrition, Bangladesh Agricultural University; Email: firstname.lastname@example.org