Dairying in this economy

**gone-a-milkin** · #1 05/30/09, 10:47 AM

Here's one that makes me sad to see...
http://www.nytimes.com/2009/05/29/us....html?emc=eta1

I guess my boss will be happy that he never went so far as to go totally organic with his herd.

myersfarm · #2 05/30/09, 06:04 PM

I know it is sad thing but look over to the left at the picture of the man feeding the calf and the quote under picture.....Mr. Russell with one of his cows on his farm. ...... it is a 250 pound calf still drinking milk.......CITY PEOPLE the reporter needed a little more FARM sense

tjm

sammyd · #3 05/30/09, 06:48 PM

Read in a farm paper last week that Organic plants around here are trying to hold at 34/cwt but they have instituted a quota system Any milk over the quota is only 15/cwt. high by nonorganic standards lately but when you have to pay for that organic feed...sheesh.

Callieslamb · #4 05/30/09, 07:20 PM

I really am sorry for this guy....but ....he owes $500,000 on his farm, mostly from switching it to organic. That is a WAY LOT of debt! Too bad he couldn't have kept it down, but then, who can truly predict the market?

sammyd · #5 05/30/09, 07:25 PM

Nobody...field man told my friend last year.."You'll never see milk below 16 again".

agmantoo · #6 05/30/09, 08:00 PM

The conventional dairy across the road from me is considering shutting down due to low return on conventional milk. He told me the production costs are exceeding the income.

Jennifer L. · #7 05/30/09, 08:04 PM

I don't think the organic guys are any worse off for prices than the non-organic dairies, though. Everyone milking is losing their shirt right now. The fact that the grain comes from the Midwest is the same for everyone milking, whether they run organic or not. And while organic grain is higher, a 30-60 cow herd can easily go to all grass/hay raised right on their places and forego grain all together. They'd take a big hit on the amount they produced, but without the cost of grain it would probably keep them afloat. I'd sure be doing it this summer if I were some of them. The organic dairies could do this, but the conventional dairies couldn't do it to that extent, because they are already getting prices for their milk in the cellar. With the higher organic milk price, it might work.

It's really unfair that some of them are losing their market, though.

I'm not a fan of the way the NYTimes does ag reporting, but maybe an article like this will encourage people to buy more milk again. I'd like to see the small guys stay in business.

Jennifer

Ken Scharabok · #8 05/31/09, 08:46 AM

A couple of years ago I was visiting with a sister in FL. They drank Organic Valley milk. I wondered how much the transportation cost was to them.

I suspect part of his problems is milking year around. Go to the thread on Consolidated List of Sticky Threads and read the one on Internships in Grass-based Dairying and Cheesemaking. They shut down during winter. Everything produced on the farm is sold direct retail.

Say he could market his cull cows as organic hamburger in health food stores??? Calves as organic veal???

As far as I know there is no research which confirms organic is any more beneficial than other agricultural products.

When I go to buy steel stock I stop in at a small salvage grocery store. I am seeing more and more "organic" products showing up in it. Cereal, canolya (sp?) oil, pickles and one other product (I've since forgotten - hell to grow old). That rather tells me it is selling slowly at typical retail outlets.

Madsaw · #9 05/31/09, 09:41 AM

We are just a regular dairy here in the great cheese state. Our milk goes for cheese at a local family owned plant. Our last check we got paid $9.47 per 100. With gas back over $2.50 and the price of everything else thru the roof its just crazy.
But, what is really neat is how the goverment has told the factories to DEDUCT money from our checks for the amount of whey byproducts that comes form our milk. No one really can explain why this is goin on. Just that the cost of converting the whey is so high we need to help foot some of the bill. Go figure. We get it every time we turn around.
Bob

ozark_jewels · #10 05/31/09, 01:17 PM

The price and availability of organic hay and grains is the reason that Morningland Dairy and cheeseplant dropped its certified organic status years ago. Even if you could afford the price of organic grains, you couldn't get the same grain from month to month as there are not many organic grain producers in this area("area" being this and surounding states). Cows do not produce well when their ration is always changing content. And that was *before* the radical rise in prices of the past few years.
We went from "certified organic" to "pastures treated organically", and lost only a couple customers. We do naturally produced rather than organic.
The only reason we could buy this place a year ago and still be doing ok in this economy is that we do everything right here. From the grass the cows graze, to the cutting, packaging and shipping cheese via UPS. If we were selling liquid milk.......we would already have gone under.

**gone-a-milkin** · #11 05/31/09, 01:41 PM

Grass based dairying, seasonal milking, and on-site value added products are all things that can help some of these folks to continue dairying. However, not a single one of these ideas can be instituted overnight. It takes time, planning, and resources to institute something sustainable.

madsaw, I absolutely do NOT understand the whey deductions. If anyone can 'splain that to me I sure would appreciate it.

The farm where I work has gone over to (mostly) grass based feeding. This is the 2nd spring so far and the pastures are improving with MIG. We've also taken on some replacement calves, at least while the grass is good. Those are good things, but w/o the ability to absorb the loss for cows who dont breed on-schedule for a seasonal dryoff...we will still be milking a few through. Cant afford to keep them, cant afford to sell them, gah.

Lots of folks here are digging deeper and selling their assets (equipment, etc) in order to hold on.

None of these economic issues are NEW to the dairyfolks though. It has always been a vow of poverty, made with sincere love.

ozark_jewels · #12 05/31/09, 05:07 PM

Quote:

Originally Posted by Jennifer L.

And while organic grain is higher, a 30-60 cow herd can easily go to all grass/hay raised right on their places and forego grain all together.

True, but most dairies in this area do not have enough hayground and/or pastures to produce *all* the hay needed for the entire winter. Most dairies buy in at least a couple months worth of hay to finish out the winter after their supply is gone. It would not be an easy transition for most, impossible for many.

Jennifer L. · #13 05/31/09, 06:34 PM

Quote:

Originally Posted by ozark_jewels

True, but most dairies in this area do not have enough hayground and/or pastures to produce *all* the hay needed for the entire winter. Most dairies buy in at least a couple months worth of hay to finish out the winter after their supply is gone. It would not be an easy transition for most, impossible for many.

Really? I had no idea, Emily. I thought most farms produced enough to support the whole herd for the year. It's the way it is around here, anyway.

Ken, about shutting down in the winter, the problem there is you have to be scored back in in the spring. If you had some equipment that was grandfathered in, you'd probably lose that status and have to start upgrading, which can be expensive. The other point is your milk plant may decide not to take you back, if they figure they've got enough milk without you. The smaller you are, the more likely a plant will say, "sorry, we don't need you any more". All it takes is for them to tempt one of the "big boys" away from another plant, and several small farms could be out in the cold if they had been seasonally milking. If you were the milk plant, would you want to fool with three or four small places, or one big outfit? Much less trouble for them to deal with the big farms.

Jennifer

ozark_jewels · #14 05/31/09, 08:04 PM

Quote:

Originally Posted by Jennifer L.

Really? I had no idea, Emily. I thought most farms produced enough to support the whole herd for the year. It's the way it is around here, anyway.

We are in an area that makes much better pasture than hay/crop land. So a lot of hay is trucked in. Some dairies actually operate on only about 20 acres and buy in *all* their hay(though that is not common). Most do mainly pasture and grow as much hay as they can. The lucky ones can grow all their hay. With many dairies operating on 60-100 acres, it can be hard to grow all the hay needed for 60-100 cows, even with intensive grazing. And with the price of land still high(especially good hay ground), its very hard to afford buying more land right now.
We usually have a couple months of very dry weather in the summer, nothing much grows. That dramatically decreases the amount of hay that can be grown in dry years. Last year was exceptionally wet......this one has been so far. We look to be heading into a dry spell now.

sammyd · #15 05/31/09, 08:20 PM

Quote:

the goverment has told the factories to DEDUCT money from our checks for the amount of whey byproducts that comes form our milk.

The govt hasn't told anyone what to do. Dairy plants have eaten small losses in the past but lately don't want to eat the big losses.
The govt sets the prices for the components but the plants make the decision to bill or not.

from the Country Today

Quote:

Trega tried to absorb the federally mandated "other solids" costs when the negative numbers started last fall, Braun said.

"The problem was, in October it was (minus) $.0047 and in November it was (minus) $.0099," Braun said. "In December, that deduct got to be almost 2 or 3 cents. It got to be too much for the dairy plant to absorb, so we had to pass some of that back on to the producer base."

**gone-a-milkin** · #16 05/31/09, 09:54 PM

So the "other solids cost" was 'federally mandated' and the plants have passed those costs on down to the producer base. Gotcha, thanks.

sammyd · #17 06/01/09, 12:18 AM

The point is that some dairies had been docking for the solids all ready, some had not. When the costs became too great the dairies passed the cost on. The govt did not all of a sudden say you must dock the farmers.

michiganfarmer · #18 06/01/09, 06:12 AM

Quote:

Originally Posted by Ken Scharabok

I suspect part of his problems is milking year around. Go to the thread on Consolidated List of Sticky Threads and read the one on Internships in Grass-based Dairying and Cheesemaking. They shut down during winter. Everything produced on the farm is sold direct retail.

.

I have thought about doing the same thing with 15 or 20 cows. A person would have to do some math to figure out how much it would cost to feed them through the winter when they arent producing.

netexan · #19 06/01/09, 07:25 AM

It appears as if the entire dairy industry in a free fall at the moment. 3 in my area have gone bankrupt in the past month, and my neighbor, who milks about 400 head, reports losing $15,000 a month and doubts if he or any others around here will make it till the end of the year if milk prices don't come back up.

KIT.S · #20 06/02/09, 02:50 PM

It seems amazing to me that dairies are getting only $15 per hundred weight, when individuals are selling raw milk directly to the consumers (illegally, actually, in Oregon) for at $6 per gallon for cow milk, $6 per half-gallon for goat milk. I had no idea at all that dairy milk was so inexpensive to the distributor. The market seems very top heavy. I would love to be able to afford to make cheese and all the other milk products we buy in the store now. Maybe I need to check out local dairies and see if they'd sell to me. Of course it would have to be "animal feed." Crazy, huh?
Kit
Lacomb OR