Drought Making Dairy Farming Tougher

Drought Making Dairy Farming Tougher
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POSTED: Tuesday, July 19, 2011 - 6:21pm

UPDATED: Wednesday, May 14, 2014 - 1:32pm

MESQUITE, NM - At Joe Gonzalez's dairy farm, it has been tough for the past few years. Like a lot of dairy farmers, it has been difficult to make money since the price of milk fell, and he has not shown a profit since 2009. But the ongoing drought has made it even tougher. Gonzalez says the price of feeding his 2,000 cows has been going up because of the drought. Shortages in hay and corn has led to higher costs to feed the cows.

Some of the corn that would have be used as feed in the past is now being sent into ethanol production and is driving up the price. And directly related to the drought, many farmers are also shifting to crops that do a bit better in drier climates, like cotton and avoiding growing hay. That also increases the price of hay. Ranchers who, in better times, fed their livestock with pastures or had animals grazing free range are now having to buy food for their animals on the open market, further increasing shortages.

Rain would help...but not this year. Even with lower prices for food, Gonzalez says that dairies across the country will continue to struggle as long as the price of milk stays at it's current level.

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As a personal friend of Mr. Gonzalez I will assure you he is not misleading you. You don't understand much about milk marketing or pricing. Just because the price of milk is high at Walmart doesn't mean dairy farmers are receiving a fair price. They receive about 21% of the retail price of milk. In addition, the milk price has certainly not kept up with the cost of inputs. Has milk doubled in cost in the last year no - yet oil has doubled and so has corn.

Alfalfa hay has also doubled in price over the past year too. Corn prices have increased over the past year or so from the high 2's and low 3's and are now in the high 6's and low 7's per bushel range. Soybean Meal is currently at $405.00 per ton plus freight, also double the price. Dairy Farmers have no ability to raise the milk price on the farm. That's all controlled by the government and processors. Dairy Farmer's are "Price Takers" and not "Price Makers" on the milk they produce everyday.

ThePope wrote: The average wholesale price of milk has been skyhigh for all of 2010 and is still rising in 2011.

I would like to see your source of the average wholesale price of milk that you claim has been "skyhigh". You need to look at both sides of the coin and compare the cost of inputs to produce the milk vs the price received by the dairy farmer.

Walk a mile in the farmer's shoes before you blast them on a full stomach.

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