The drought that spans the nation’s mid-section and into the northeast will have ramifications for dairymen across the country. Is John Boehner listening?
The drought that spans the nation’s mid-section and into the northeast will have ramifications for dairymen across the country.
Feed availability will be critical to those at the drought’s epicenter; feed affordability will be crucial for everyone else.
Already, we’re hearing of entire herds being sold for beef in Missouri. “I think we could lose up to a third of our dairy cow numbers," says Missouri Dairy Association (MDA) President Larry Purdom and a dairy farmer from Purdy.
“Some are just giving up. Yesterday I saw three herds sell out at the Springfield livestock auction and two more herds were ready to go,” Purdom said July 25. For the full story on Missouri, click here.
In Wisconsin, Dan Undersander, a University of Wisconsin-Extension forage specialist, is urging dairy producers that will be short of forage to consider planting an emergency crop of corn or small grains yet this year. That’s almost unheard of this far north, but desperate times call for emergency measures. And that’s assuming—no, flat out hoping—there will be enough moisture to germinate and sustain a second seeding.
South Dakota Extension Dairy Specialist Alvaro Garcia says soybeans and sunflowers can be harvested as emergency forage. For more on that, click here.
For those producers who are purchasing all of their feed, the situation isn’t any better. I plugged a few numbers into a Nebraska Extension spreadsheet to look at per cwt. of milk feed costs and breakeven milk prices.
If I use $8/bu. corn, $510/ton soybean meal and $250/ton hay for a 24,000 lb./cow herd, feed costs jump to $16/cwt. of milk produced and the breakeven milk price jumps to about $22.50/cwt. For a 20,000 lb./cow herd, feed costs shoot to $17.75/cwt. of milk and the breakeven milk price skyrockets to $25/cwt.
Out west, the California Department of Food and Agriculture’s (CDFA) decision July 20 on the Class 4b whey hearing will offer—at best—a dime’s worth of relief to the 4b price. Even that was a political decision by Karen Ross, CDFA Secretary. The CDFA hearing panel actually recommended no increase in the whey factor value. Click here for more detail on the ruling.
An analysis of milk and feed prices by Rob Vandenheuvel, general manager of the California Milk Producers Council, shows that California’s feed prices are actually a percent or two lower than the all-feed price average of the rest the country. Where California is disadvantaged most is in milk price, which typically is $1.45/cwt. less than the all-milk price for the rest of the country. For more on this analysis, click here.
In the end, California producers might have the toughest row to hoe over the next 15 to 18 months as everyone waits for the 2013 crop to come in. They will have as high of feed prices as everyone else but lower milk prices. With many California dairies still bereft of equity from 2009, California might join Missouri in unprecedented herd liquidations.
The only hope is passage of a farm bill with immediately retroactive margin insurance or massive emergency drought assistance from the federal government. One estimate I’ve seen for dairy alone is $2 billion. Is Speaker of the House John Boehner (R., Ohio) listening?