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Can the Southeast Be Saved?

May 11, 2011
By: Linda Leake, Dairy Today Freelance
neil moyeDTmay11
By grazing and growing grain, his startup North Carolina dairy will succeed, Neil Moye believes.  

Revitalization of the region's dairy industry requires cooperation among producers, processors, marketers, retailers and lenders.

In the wake of what many call the Great Recession of 2009, can the Southeast dairy industry revitalize? More to the point, is there enough profit potential to revitalize?

"The Southeast continues to be a milk deficit region, and that’s good news for dairy producers," says Rick Smith, president and chief executive officer of Dairy Farmers of America. "It signals unmet demand, which indicates that profit potential exists."

Order reform tops the list of challenges the Southeast must address in order to revitalize its dairy industry, says Farrah Newberry, executive director of Georgia Milk Producers Inc.

Bonus Content

Southeast grazing:

"Fluid milk market prices need to be stabilized. Producers need to know that their over-order premiums and Class I differentials will remain in the future before making the large investments required for more milk production," she says. 

Southeast revitalization depends largely on personal mindsets, says Michael Roberts, an Extension agricultural economist with North Carolina State University.

"It will take people who see the treasure in the trial, and those with a can-do attitude who are willing to work together with those they haven’t in the past," he says.

"It will take cooperation among all the players in the dairy industry, including producers, processors, marketers, retailers and lenders."

Roberts recommends using a toolbox that includes:

  • better seed varieties to increase feed production;
  • information systems that provide easy access to financial benchmarking data to help make sound risk management decisions and manage razor-thin margins;
  • information from the Internet and podcasts that can be listened to while working;
  • videoconferencing to gather Extension information and to network with other producers;
  • social media sites that support other players; and
  • marketing risk management strategies.

"Producers who pay more attention to running a business rather than producing more milk will thrive," Roberts says.

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FEATURED IN: Dairy Today - May 2011

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