Can This Radical Approach to Dairies Save US Farms?

For the dairy folks and/or beef folks with questions about udders, milk and mastitis.
Post Reply
User avatar
HDRider
GURU
GURU
Posts: 4712
Joined: Mon Jul 25, 2011 9:25 am
Location: NE Arkansas
Has thanked: 10 times
Been thanked: 13 times

Can This Radical Approach to Dairies Save US Farms?

Post by HDRider » Fri Mar 15, 2019 12:43 pm

As the latest crisis in American dairy enters its fifth year, the word “desperate” has begun to pepper the descriptions of a situation that started off horrible in 2014—with plummeting milk prices due to one more in a long line of gluts—and has worsened ever since. California, the country’s largest dairy-producing state, is currently losing about one dairy farm a week. Wisconsin, the second-largest producer, is losing two a day; it lost 691 in 2018 alone.

So when the usually regulation-averse Wisconsin Farm Bureau Foundation (WFBF) announced in December that its 240 dairy delegates had voted to open up discussion of supply management—a program implemented in Canada some 50 years ago to stabilize prices for its own dairy farmers—it wasn’t an enormous surprise.

At the root of the issue in the U.S.: Farmers are producing too much milk. When prices go down, they produce more milk to make up for the profit loss. When prices go up, they produce more milk to take advantage of the opportunity. The underlying premise of supply management is simple: Producers limit the amount of milk they put on the market—and therefore the number of cows, and the amount of feed required—so that it’s in line what they believe consumers will purchase.

https://civileats.com/2019/03/11/can-th ... -us-farms/
bball wrote: "The juice wasn't worth the squeeze."
Dun said, "You gotta be flexible. Do whatever you have to do for the best results within your limitations."

User avatar
Red Bull Breeder
GURU
GURU
Posts: 7247
Joined: Thu Jan 31, 2008 7:26 am
Location: North Arkansas
Has thanked: 58 times
Been thanked: 58 times

Re: Can This Radical Approach to Dairies Save US Farms?

Post by Red Bull Breeder » Sat Mar 16, 2019 6:51 am

Nope won't work. To many thinking they can milk a almond.

User avatar
farmerjan
GURU
GURU
Posts: 2376
Joined: Thu Sep 01, 2016 7:54 pm
Location: Shenandoah ValleyVirginia
Has thanked: 106 times
Been thanked: 31 times

Re: Can This Radical Approach to Dairies Save US Farms?

Post by farmerjan » Sat Mar 16, 2019 10:19 pm

Red Bull Breeder wrote:
Sat Mar 16, 2019 6:51 am
Nope won't work. To many thinking they can milk a almond.
But milking an almond is still much more expensive than some form of a controlled "quota" for farmers....

Farmers here in Va are talking some sort of "quota" system, like Canada's.... to keep the small farms in production and to provide a living wage to the farmer. One of the biggest problems is the location of farms compared to the markets. They may be crying "SURPLUS" but the processing plants here in Va and the surrounding areas CANNOT FIND enough milk to process. We are basically a "fluid milk market"; meaning that most of our milk goes for fluid (drinking) milk. The drivers juggle where they are taking loads because the plants cannot process enough milk to meet their needs.

The other thing is, some of the milk "buying" companies, are crying surplus out of one side of their mouth.... and offering a BONUS for farms that are big enough to ship a half or whole tankerload at a time. So the smaller farmer 50-150 cows, is getting hit from both sides. They charge them MORE for shipping than the bigger farms, and then they don't get the bonus price, which can amount to $.20 to $.40 PER Hundred pounds of milk shipped. So if a farmer is shipping something like 24,000 lbs he will get an EXTRA $.20 per hundred for his milk. If he ships over 48,000 he gets $.40 per hundred bonus. That's an extra 700 month just for the bonus on a 24,000 pickup....

They don't want to make the stops to the smaller farms as it is too time consuming and "costs them". So now they are penalizing them. The "get bigger" thing has gone to extremes with the dairy farms. But they are driving the industry today. One of these days, someone is going to wake up and realize that they are not sustainable in the areas they are located. Often in mild climates, and pulling more water from aquifers, that are being depleted faster than they can ever be recharged. The amount of manure and waste produced is slowing contaminating our ground water and will eventually seep down into our aquifers and wells. The amount of feed needed that is not produced on site and is often trucked in, and then all the manure and such has to be trucked out... there are more consequences than what are being shown. We are facing it here with the huge number of poultry houses and from what I hear, there are many more in Tn and other areas. Places to "dispose of the waste" are a big deal now.

YoungAngusCattle
Cowhand
Cowhand
Posts: 34
Joined: Wed Mar 06, 2019 9:43 am
Has thanked: 1 time
Been thanked: 8 times

Re: Can This Radical Approach to Dairies Save US Farms?

Post by YoungAngusCattle » Sat Mar 16, 2019 10:45 pm

The same thing is kinda going on for us row croppers. Companys made equipment too big so 1 guy can cover a couple hundred acres a day so the big guys might as snatch up everything they can. Paying top dollar cash rent to do so because they deem it acceptable to make $10 an acre farming, so adding another 300 acres is not big deal if they can cover it in a day and they get a bigger discount on inputs the more acreage they have. However a small row crop farmer like me can't compete because its not cost effective for me to only make $10 an acre on a farm that will take me 2 or 3 days to cover on top of that I don't have the man power to even make it feasible.

The only difference with this is I think the dealerships realize they messed up because they aren't nearly selling the machinery they used to so they gotta make up the income difference by pricing machinery higher and parts higher. It just comes down to we are producing too much getting paid they same amount we did in the 80s, but the ground inputs have gone up 400% since the 80s. The only good thing about this is the big guys are going broke slowly trying to make their high dollar cash rent, it's really interesting to see a guy that used to run 8 combines get down to 2 from a different company because the last one learned the hard way to not lease him anymore equipment.

Back on topic, I have been preaching to everyone I know not to buy Walmart milk, because anyone that can sell milk for $1 a gallon doesn't have the best interest of the dairy farmers in mind.
"Experience is something you don't get until just after you need it." - Steven Wright
"Perfection is not attainable, but if we chase perfection we can catch excellence." - Lombardi

User avatar
HDRider
GURU
GURU
Posts: 4712
Joined: Mon Jul 25, 2011 9:25 am
Location: NE Arkansas
Has thanked: 10 times
Been thanked: 13 times

Re: Can This Radical Approach to Dairies Save US Farms?

Post by HDRider » Sun Mar 17, 2019 8:42 am

Something is going to pop somewhere.
bball wrote: "The juice wasn't worth the squeeze."
Dun said, "You gotta be flexible. Do whatever you have to do for the best results within your limitations."

YoungAngusCattle
Cowhand
Cowhand
Posts: 34
Joined: Wed Mar 06, 2019 9:43 am
Has thanked: 1 time
Been thanked: 8 times

Re: Can This Radical Approach to Dairies Save US Farms?

Post by YoungAngusCattle » Sun Mar 17, 2019 9:17 am

HDRider wrote:
Sun Mar 17, 2019 8:42 am
Something is going to pop somewhere.
And when it does the big guys are going to be the first ones to go.
"Experience is something you don't get until just after you need it." - Steven Wright
"Perfection is not attainable, but if we chase perfection we can catch excellence." - Lombardi

User avatar
Jogeephus
Mentor
Mentor
Posts: 24197
Joined: Mon Jul 17, 2006 9:44 pm
Location: South Georgia
Has thanked: 26 times
Been thanked: 32 times

Re: Can This Radical Approach to Dairies Save US Farms?

Post by Jogeephus » Sun Mar 17, 2019 12:17 pm

I've been reading a book lately that goes into detail on certain foods and how these shaped national agricultural policies throughout the world. What I found interesting is there are several countries who have a lot of dairy cattle but milk is scarce because the dairymen choose to make cheese and other products on the farm rather than selling milk which is the cheapest product. According to the book, this has kept the dairy industry small and healthy in these countries and small dairymen can make a good living without having to run so many head since their profit margins are greatly increased. One small country produces 275 different varieties of cheese because of different environmental influences on production. Another point the book made is that cheese and other milk products aren't as perishable as the milk itself so the producer is not so affected in lulls in the milk market like what happens when schools are out and children are at home drinking sugary drinks.

I don't know if this is the solution but I think it would be a good start but I doubt it would ever happen in this country with the regulation and all the hoops one has to overcome to sell straight from farm to table. I think reducing the amount of vertical integration and government bureaucracy would be good for everyone in agriculture but I doubt it will happen.
Experience - the ability to instantly recognize a mistake when you make it again.

Stocker Steve
GURU
GURU
Posts: 8547
Joined: Mon May 02, 2005 8:28 am
Location: Central Minnesota
Has thanked: 28 times
Been thanked: 24 times

Re: Can This Radical Approach to Dairies Save US Farms?

Post by Stocker Steve » Sun Mar 17, 2019 1:11 pm

Maybe. Organic milk slowed the decline here, but they are struggling now also.

Farmers are producing too much of everything. A difference with dairy is it much harder to work off farm, compared to crop or beef operations. So they are less resilient.

I spent some time on enterprise budgets this winter. If you are using mostly manure for fertilizer, have built up soil OM to where you get above average yields, bale or graze crop aftermath for livestock - - return to land and management with current low prices is still in the $100 to $200 per acre range. Land rent is $40 to $80 per acre. So you could cash flow about $100 per acre on rented ground, potentially more on deeded ground. Some people making reasonable profits out there.

There are still financial issues for new comers or young families - - "one time" start up costs, return on investment, and family living expense...
Stocker Steve

User avatar
HDRider
GURU
GURU
Posts: 4712
Joined: Mon Jul 25, 2011 9:25 am
Location: NE Arkansas
Has thanked: 10 times
Been thanked: 13 times

Re: Can This Radical Approach to Dairies Save US Farms?

Post by HDRider » Sun Mar 17, 2019 5:10 pm

Jogeephus wrote:
Sun Mar 17, 2019 12:17 pm
I've been reading a book lately that goes into detail on certain foods and how these shaped national agricultural policies throughout the world. What I found interesting is there are several countries who have a lot of dairy cattle but milk is scarce because the dairymen choose to make cheese and other products on the farm rather than selling milk which is the cheapest product. According to the book, this has kept the dairy industry small and healthy in these countries and small dairymen can make a good living without having to run so many head since their profit margins are greatly increased. One small country produces 275 different varieties of cheese because of different environmental influences on production. Another point the book made is that cheese and other milk products aren't as perishable as the milk itself so the producer is not so affected in lulls in the milk market like what happens when schools are out and children are at home drinking sugary drinks.

I don't know if this is the solution but I think it would be a good start but I doubt it would ever happen in this country with the regulation and all the hoops one has to overcome to sell straight from farm to table. I think reducing the amount of vertical integration and government bureaucracy would be good for everyone in agriculture but I doubt it will happen.
Farmers and most small operators are regulated out of the market.

Image
bball wrote: "The juice wasn't worth the squeeze."
Dun said, "You gotta be flexible. Do whatever you have to do for the best results within your limitations."

User avatar
Jogeephus
Mentor
Mentor
Posts: 24197
Joined: Mon Jul 17, 2006 9:44 pm
Location: South Georgia
Has thanked: 26 times
Been thanked: 32 times

Re: Can This Radical Approach to Dairies Save US Farms?

Post by Jogeephus » Sun Mar 17, 2019 8:08 pm

HDRider wrote:
Sun Mar 17, 2019 5:10 pm

Farmers and most small operators are regulated out of the market.
Maybe not completely regulated out but as a Dr. with the USDA once told me, "unless you find an agent willing to sit down with you and spend time with you going over what is and isn't important the shear volume of the paperwork will simply take the wind out of your sails and you will toss you hands up in disgust".

The other day my daughter who is about to graduate with a degree in nutrition was talking about a possible business venture which she feels would be good. She is pretty business savvy and her latest stock purchases have doubled in price in the last six months so she is pretty sharp and in tune with the wants and needs of her generation and IMO her idea was sound.

Her main concern wasn't where to get the cash, or how to set up the business but her main concern was how hard would it be to have to deal with the government and its bureaucracy. Her other choice is not to be an entrepreneur and do what her heart desires but to go work for a large established company so she won't have the stress.
Experience - the ability to instantly recognize a mistake when you make it again.

User avatar
HDRider
GURU
GURU
Posts: 4712
Joined: Mon Jul 25, 2011 9:25 am
Location: NE Arkansas
Has thanked: 10 times
Been thanked: 13 times

Re: Can This Radical Approach to Dairies Save US Farms?

Post by HDRider » Mon Mar 18, 2019 6:35 am

I hope she can find a way Jo
bball wrote: "The juice wasn't worth the squeeze."
Dun said, "You gotta be flexible. Do whatever you have to do for the best results within your limitations."

User avatar
Jogeephus
Mentor
Mentor
Posts: 24197
Joined: Mon Jul 17, 2006 9:44 pm
Location: South Georgia
Has thanked: 26 times
Been thanked: 32 times

Re: Can This Radical Approach to Dairies Save US Farms?

Post by Jogeephus » Mon Mar 18, 2019 9:38 am

HDRider wrote:
Mon Mar 18, 2019 6:35 am
I hope she can find a way Jo
I do too. I think she would be much happier working for herself but with all the bureaucratic headache will it be worth the squeeze? I think this decision is similar to deciding to hike the Appalachian trail. No doubt most would jump at the chance since it would be a great experience but it would definitely give one pause if they knew they'd have to carry some whining bytch on their back the whole trip.
Experience - the ability to instantly recognize a mistake when you make it again.

Post Reply