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Faunsdale, AL | A dairy farm has a huge multiplier effect on jobs. Not only is dairy "labor intensive", it's input intensive and capitol intensive. The input part is where the multiplier effect comes in, lots of jobs in other parts of industry and agriculture depend on dairy.
Lots of the negativity can be directly attributed to the period since 2009. Nothing like watching your equity drain away with nothing you can do about it except sell out when everyone else is in the same situation.
For us, we need to go back to farming like we did in the 1950's and 60's, growing a majority of our feed and forage, grazing as much as possible etc. We have moved more toward commodity feeding and minimized forage production per cow (translates as increased herd size) since then. Now it's come back and bitten us!
Ethanol blending credit in the US has resulted in huge increases in corn cost and everything follows corn unless there is a huge local surplus of something. The idea that there is all this distillers grains out there, making it cheap to feed livestock ignores the fact that only a fraction of each bushel of corn that goes into an ethanol plant comes back out as DDG, and there's very little/no starch in that. Not every class of livestock can do without the starch we're burning in our cars.
Now this fall, add in the drought in Texas and feed prices have gone up 50% on average across the board. Only thing that has moderated a bit from the old crop highs is corn and soybean meal, probably because of harvest pressure on price and because of financial market capitol movement out of grain.
The prospect for milk prices that can support the recent increase in forage, feed, fuel and labor/family living expense/medical cost etc is bleak. The basic fact is the only way we have a decent price here in the US is when there is a natural disaster somewhere that impacts milk production enough to create a shortage. Drought in Australia and NewZealand for example. Very bad if you're where the drought or flood or whatever is, but helps everyone else out.
On your own farm, the only response you can make to lower prices is to attempt to increase production as much as possible to spread the fixed costs over more pounds of milk. Everyone that can do it does, until they can go no longer, and then they sell out or go bankrupt and sell out. Not a "nice" scenario, but realistic here in the US. | |
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Negativity towards dairy farming?
