As the global COVID-19 outbreak continues to disrupt life as we know it, the dairy industry knows only one thing for sure: There's a lot left to learn about the impact the pandemic will have on global markets.

Ted, T3 and Anna phone in for a discussion on dairy markets buffeted by confusion.

But as Ted reminds us, uncertainty is no stranger to dairy. He says the industry is equipped to handle what's thrown at it.

Anna: Welcome to the ''Milk Check,'' a podcast from TC Jacoby & Company where we share market insights and analysis with dairy farmers in mind.

Ted: Leading into this by now I think everybody's interested in knowing what effect the coronavirus will have on the dairy industry. And of course, at this point in time, the effect is mostly confusion in that consumers are going into the grocery stores and cleaning out the milk section, buying long-life products including cheese and shying away from going into restaurants and food service establishments. And so we have a migration of milk away from cheese plants serving food service and special kinds of group facilities, restaurants and so on, hotels, towards retail, cut wrap and retail-type packages. In addition to that, we have a shortage of milk at the bottling plant because people are going in and cleaning out the dairy case similar to what they traditionally do just before a hurricane hits down in Florida.

The normal effect of this is to have this surge in production and change, and then a week to ten days later, everybody has a lot of inventory in their refrigerator and sales start to back up and surplus begins to exist. Whether that's gonna happen this time or not remains to be seen. It could not in that everybody seems to be heading for their home and then planning on staying there for a while. And I think most people are expecting to be there at least a month. So that's gonna mean that they're gonna keep an inventory of milk, long shelf life products and so on, and they're gonna be eating those kinds of products at home as opposed to going out to restaurants.

School lunch business is another issue. I understand that in some areas, the school milk is being delivered by school buses. I'm not quite sure how that works. But most of the milk being consumed now will be consumed at the kitchen table. So that also bodes well for retail milk sales. Does not bode well for people who are looking at school lunch business, school milk. So there is confusion, and how long it will play out remains to be seen. It could go on for a week or two and it could go on for a month or two, maybe longer. So we'll have to see.

The dairy industry in general can handle whatever is thrown at them. Production was just announced for last month and it's up some big numbers, roughly one and a half percent depending on who you're reading. One source says 2%. That's a very bearish number with regard to milk and milk pricing under the longer term and would indicate that milk pricing, a Class III price somewhere in the $17.00, $17.50 range, pretty attractive to dairyman for them being increased production that much. Our general view of it is that anything over 1% is bearish as far as milk is concerned. And I think the markets right now in addition to the negative effects of the corona issue, I think production is also weighing heavily on the markets. Even though the cheese market went down a little bit today, the futures market went up because I believe basically that the pressure down is overdone and so it's rebounding somewhat. Ted, would you wanna weigh in on the cheese market?

T3: Sure. Obviously what's happening in cheese, just like all the rest of the, not just dairy, but the food industry,