Producers Offer a Snapshot of Survival
Sep 29, 2010
With thousands of producers attending World Dairy Expo this week, it’s probably as good a place as any to gauge what this industry’s front-liners think about their circumstances. I walked the barns and pathways of Expo Wednesday to find out.
What I learned didn’t exactly match the golden autumn day that enveloped Madison, Wis. Most of the producers I talked with are just trying to survive, and they remain concerned about their ability to return to profitability. They were mostly what might be considered small dairies – those with less than 500 cows – but I can’t believe their big-operation brothers would have a much sunnier outlook.
“Milk prices are better than 2009, but they’re not as high as we wanted,” said Charles Voelker of Prairieville, Mo., who’s here at Expo showing Brown Swiss cows.
Still, Voelker has been able to show some profit, unlike last year. He’s continued to cut costs, worked hard to put up higher quality forages and lowered his cows’ Days In Milk (DIM) period from last year’s 220 to 177 this year.
“I was hoping exports would hold up milk prices, but corn futures are at $5/bu.,” he said. “If milk prices drop, we’re going to go back to 2009 pretty quickly.
|John Prokop of Middleburgh, N.Y.
“The industry may have to go with some sort of supply management program, even though I hate it,” Voelker added. “With five kids, I might not be able to expand with a supply management program in place, but we’ve got to survive first.”
Things are better this year for Mark Hornbostel of Campbill Hill, Ill. He’s getting about $18/cwt. for his milk and has cut back on feed costs, largely by mixing his own feed. He and his father would like to expand their small Brown Swiss operation but that isn’t going to be easy.
“We’ve run into so much red tape with the EPA, with soil and water quality regulations,” Hornbostel said. “To keep going, we’re either going to have to expand or quit.”
Mark and Emily Michel of Waterloo, Wis., say they’re still trying to hold their heads above water, despite this year’s price improvement. A fourth-generation family operation, they farm 200 acres and milk 55 cows. Their latest milk check brought them just over $16/cwt., and this year’s corn crop is much better than last year’s.
“But it’s more costly to fix and maintain equipment,” Mark says. An 80 hp tractor costs $80,000 and a brand-new combine is $300,000. They see no way to afford that.
At his Middleburgh, N.Y., dairy, John Prokop says things are a little better financially with prices at the high end of $17/cwt. “I can pay my bills now, although it’s difficult to pay back the line of credit I used last year.”
As a way to streamline his operation, Prokop has started a dairy profit team. Every six weeks or so, he meets with his Farm Credit lender, veterinarian, nutritionist and CAFO planner. Together, the team walks the dairy, looking for ways to improve the operation. It’s made a big difference.
“For example, we didn’t have a calf person before,” Prokop says. “It was more of a team effort. Now, we have one person in charge, and it’s really paid off. We now have a calf mortality rate of 1% or lower.”
Like the others, Prokop has learned to run his dairy more efficiently than ever. Things can’t get much leaner. Let’s hope their efforts pay off.