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Dairy 2014: A Pivotal Year

January 25, 2014
By: Jim Dickrell, Dairy Today Editor
Kees de Jong 10 10 030
California, the nation’s largest milk-producing state, is beginning its slow recovery from the dairy depression that gripped the country in 2009. State milk prices are now tracking a competitive path with neighboring states.  
 
 

Prices, legislation and trade are all key

Duane Alberts and his brothers David and Richard were in the eye of the 2013 maelstrom that left thousands of acres of Minnesota and Wisconsin alfalfa dead from winterkill.

"We walked the fields on April 27, and we were shocked that our alfalfa wasn’t coming on like it should. There was almost no growth," Duane says.

Only five of the Alberts’ 400 acres of alfalfa came out of dormancy this past spring. Then a freak snowstorm on May 2, which dumped 10" to 12" of wet, suffocating snow on fields, added to the misery.

The Alberts, who farm near Pine Island, Minn., had never seen such forage losses. The farm has been in the family since 1917, with the fourth generation now involved—David’s children. This past year, they had to scramble for forage to feed their 600 cows plus youngstock. The winterkill was widespread. Eighty percent of alfalfa in southern Minnesota and 50% of Wisconsin’s crop (1 million acres) died.

The Alberts replanted 200 acres of alfalfa on land that had been corn in 2012. With a late frost-free fall, they got two cuttings off the new seeding. Even though corn went in late, it yielded 22 tons per acre. "That’s a very acceptable yield for us, given the late planting," Duane says.

The other good fortune was strong milk prices throughout 2013. "The real loss with the alfalfa winterkill was the protein," Duane says. "With milk prices just under $20 per cwt, that paid for the protein supplement we had to replace."

As they move into 2014, finding protein supplement remains a challenge. They recently bought their first-ever load of barley malt sprouts, and for the first time in a decade, purchased soybean meal.

Through perseverance, creativity and luck, the Alberts remain optimistic that 2014 will bring better fortunes.

California comeback. California, the nation’s largest milk-producing state, is beginning its slow recovery from the dairy depression that gripped the country in 2009.

"We’re cash flowing on a current basis, but we still have a mountain of debt left over from 2009," says Rob Vandenheuvel, general manager of California’s Milk Producer Council (MPC).

Lower feed costs and higher butter and milk powder prices are the reason. Corn prices are running $200 per ton, 50% less than in early to mid-2013, he says. Forage and hay supplies, however, remain tight due to high demand, lower supply and export hay sales to China.

But milk prices have finally rebounded, thanks in part to strong exports. California milk prices now hover above $20 per cwt, competitive with nearby states. For the past several years, California milk prices had lagged by $1 to $1.50 per cwt. Coupled with high feed prices fueled by

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FEATURED IN: Farm Journal - February 2014

 
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