Cows Coming Home to the Midwest
Dec 08, 2009
Note: We apologize for the confusion. If you are coming to this from the Dairy Today eUpdate, the Dairy Talk column in the newsletter was from December 2008 (Will Lower Feed Prices Be Enough). It has now been updated with the Jim's current topic "Cows Coming Home to the Midwest."
By Jim Dickrell
When you’re in the midst of a raging forest fire, it’s difficult to lose track of what’s going on in the rest of woods.
John Kaczor, with California’s Milk Producers Council, provided one of those “duh” moments last week in his weekly column. He points out that Midwestern milk production—when you count Minnesota, Wisconsin and Michigan as one region--has now equaled the production of the Western production of California and Arizona.
A year ago, this Western production was running 315 million lb./month higher (8.5%) than the Midwest. Since then, 98,000 have left California and Arizona (largely thanks to the Cooperative Working Together program, sub-$10 milk in California, and historically high feed prices). Meanwhile, the Midwest has added 10,000 cows over the last year (and 19,000) over the past two.
Why the Midwest Renaissance? Anecdotal evidence from Michigan suggests part of the cow number surge is the result of the loss of BST. When co-ops there banned BST several years ago, some Michigan producers added cows to maintain milk volumes.
The story is different in Wisconsin and Minnesota. In these two old “M-W” price series states, entrepreneurial producers have learned how to milk cows in freestalls and parlors, and large foot-print, cross-vent barns are now becoming the facilities of choice. These new barns, with some housing 3,000 cows (some are even 2X that size) allow M-W producers the best of both worlds—warm housing in the winter; cooler housing in the summer. This has allowed milk production to go on unabated through -20°F weeks in January and +90°, 70% humidity weeks in July and August.
In fact, in the midst of the dairy price crisis last summer, three Wisconsin facilities housing some 12,000 cows came on-line. The facilities had been planned 12 to 18 months earlier, financing has been secured, and Wisconsin processing facilities still had available capacity to take the milk.
Kaczor, in his column, rightly questioned whether the present push to the Midwest will continue. After all, California plants once again have available capacity. But the carnage wreaked by $150/cow/month losses in the Golden State will take some time to correct. Environmental challenges, both water and air, won’t be any less. And having been stung hard by the Great Recession, one has to wonder how much stomach California producers have to expand.
In any event, the Midwest is proving it can compete with the boys out West. The I-29 corridor in particular—eastern South Dakota, northwest Iowa and western Minnesota--is proving to be an ideal milk producing area. There is lots of open space, plenty of feed and ethanol by-products, and a growing culture that’s starting to realize cows are good for local economies and the environment.
With new investment in large-scale processing plants and re-investment in existing facilities, the Midwest is regaining its competitive advantage in feeding the eastern half of the United States. And with the right kind of regulatory reform, it could become a global competitor as well. In whey protein markets, it already has.
—Jim Dickrell is editor of Dairy Today. You can reach him via e-mail at email@example.com.
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