Beyond the Next Milk Check

November 28, 2012

By: Dairy Today Guest Editor

Larry Hancock

Muleshoe, Texas

A dairy pioneer on the Texas High Plains, Prairie View Dairy milks 4,200 Holsteins.

We in the dairy industry have had a roller-coaster ride of prices that we have paid and received to keep our businesses in operation over the last few years.

We deal with milk prices, feed prices, utility and fuel prices, service prices employee/employer prices, and I’m sure you can come up with a dozen more. Past months’ articles have dealt with cattle risks, health risks, management risks, and this month we are discussing cost risk.

I don’t pretend to be an expert on the subject. I know how difficult the economy has been for all of us. We have been blessed to be able to continue forward through this latest challenge. As much as we would like to be idealistic about how we dairy and what we can do on our facilities, we know the bottom line is what enables us to continue year after year.

So saying, here goes: We have to think further than the next milk check.

To do so, we try our hardest to find the best feeds at the best cost. Sometimes that means saying no to something we have fed for a long time and changing over to another commodity that is a better value. We must always make sure that we meet the needs of the cows in a complete ration. We have a maintenance schedule on the dairy, and we try to stick to it so the equipment is in good shape and replaced when needed.

I was a holdout when it came to milk futures, worrying that missing the lows would also cause us to miss the highs in milk pricing. But just lately, I have tried to use the milk futures program to ensure a profit. So far, I seem to book at just the right time to miss the highs and haven’t seen any real advantage. I won’t give up yet, but I’m not sold on it being the way to go.