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Dairies hurt by falling milk prices, rising feed costs

Dairy farmers dealing with falling milk prices are also seeing all their feed prices soar.

Led by high alfalfa prices, dairymen all over the state have seen their prices for corn, wheat, almond hulls, soybeans and other feedstuffs rise during the past year.

“Dry roughage, which is hay, has gone up 23 percent since last year at this time,” said Tiffany LaMendola, director of economic analysis for Western United Dairymen.

Add to that the price of corn, which has gone up 34 percent since last year, and dairy farmers are scrambling to find ways to keep their cows healthy and productive.

“The average cost of production for dairymen is $18.04 per hundredweight (of milk),” LaMendola said. “But the minimum price for milk is $16.22 (per hundredweight). Some of these guys are definitely seeing negative margins.”

The northern coastal area of the state is facing even worse margins, LaMendola said. Growers in that area have production costs of more than $20 per hundredweight of milk.

Because the price of milk to the producer was recently lowered by the California Department of Food and Agriculture, Western United Dairymen and the Alliance of Western Milk Producers, along with California Dairy Women, have filed a petition with the CDFA to increase the price of milk to the producers.

“We basically are trying to help dairy farmers meet some of their growing costs,” LaMendola explained.In California, there are about 950,000 acres of alfalfa, the core feed that dairy producers use to keep their cattle producing at peak efficiency. But because of the price of other feedstuffs, some growers have taken out alfalfa fields and grown other crops, such as wheat.

Aaron Kiess of the California Alfalfa and Forage Association said growers in the Imperial Valley, a big growing area for alfalfa, have planted 18,000 acres to other crops.

“They also have a water issue too, which has affected a lot of growers,” Kiess said. Crops such as wheat and corn are bringing high returns for the amount of work put into them, he said, and growers want the highest return for their money.

Alfalfa fields can be cut for hay up to nine times a season, depending on the weather, and fields can be used for more than one year. In Merced County, alfalfa hay was the eighth-most valuable commodity in 2007, fueled by the dairy industry. The crop was worth more than $110.8 milion last year, according to the Merced County Agricultural Commissioner.

According to the U.S. Department of Agriculture, the price of supreme graded alfalfa hay, the hay that dairymen feed to their milk cows, is going for $240 a ton in the Merced area. Even alfalfa hay rated only fair, which would be fed to dry cows and young cattle, is going for $195 a ton.

There isn’t much that dairy farmers can do to offset the cost of alfalfa except suck it up and pay the feed prices, LaMendola said:

“They really are between a rock and a hard place.”

Not exactly a hay-day for dairy farmers.

Reporter Carol Reiter can be reached at (209) 385-2486 or creiter@mercedsun-star.com.

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