High costs, hard times

June 15, 2008 07:00 PM
Darrell Vanden Berge, with his son Curtis (foreground), says high fuel cost boost feed transportation charges and hurt as much as the higher feed prices.

California dairy producer Darrell Vanden Berge says the prospect of escalating feed and fuel inputs is "scary.” Already, he's paying $252/ton for rolled corn, up nearly $100/ton from a year ago.

"Everything's higher,” he says, including:

        Cottonseed, his highest priced commodity, which costs $363/ton, up from $240/ton last year.

        Canola, priced at $195/ton. New crop is trading at $279/ton and the spot market recently peaked at $327/ton;

        Alfalfa, at $260/ton, up $30/ton from year-ago levels;

        Almond hulls. Vanden Berge contracted his current supply at $127 ton. But new-crop was already trading at $179/ton in early May.

        Oat hay, priced at $197/ton versus $145 in 2007;

        Dried distillers grain, priced at $217/ton compared to $130 last year.

While he grows about 35% of his own feed, Vanden Berge depends on outside sources for the rest. To cope with high costs, he's culling more from his herd. He's also encouraged by the strengthening U.S. dairy export market.

But California's problem of excess milk production and too little processing capacity weighs heavily on his mind -– and his income. His March milk price reached only $16.04/cwt., compared to the $20/cwt. he averaged for the last half of 2007.


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