Ozarks Farm & Neighbor asked four MU Extension Dairy Specialists about upcoming trends, trials and points for opportunity in the dairy industry. Stacey Hamilton, Tony Rickard, Ted Probert and Joe Horner all contributed to this question-and-answer interview.
What is the outlook for the dairy industry in the Ozarks?
The Ozark’s dairy industry outlook for the rest of 2013 and 2014 will likely be lower milk prices but decent margins. Many Ozarks dairy producers have restocked with low-cost, home-grown forage supplies this summer. Purchased feed prices should drop as fall harvest progresses. Co-product prices should drop also this fall too as ethanol plants crank up to take advantage of lower grain prices.
How should producers prepare
themselves?
As corn prices decline, milk prices will decline as producers expand milk production. Dairy producers comfortable with price risk management tools may want to start locking in margins. Those unfamiliar with using price management tools may want to learn how to use them. MU Extension is sponsoring daylong workshops around Missouri the first week of December to teach producers to use existing price risk management tools. The USDA MILC program is expiring. Without MILC or a new farm bill, there is no government-sponsored safety net to protect dairy producers against adverse prices.
What techniques are allowing producers to gain an edge on cost in production?
Feed, labor and replacements are the major costs on a dairy farm. High quality, home-grown forages have to be the first priority. Careful attention to forage testing and ration rebalancing pays. Modernize parlors, improve holding areas and review milking procedures to lower labor costs. Rebreed cows on time using repro protocols to keep the herd fresh. Cool cows during heat stress with misters and fans. Confinement producers can pick up milk by remodeling free stalls to proper dimensions and bedding with deep sand. Compost pack buildings are working well for producers. In today’s price environment, replacement costs can be cut by not raising any more heifers than needed to replenish the herd.
What are the marks of success in the industry right now?
The 2012 drought following the 2011 drought in some areas, following low prices in 2009 and 2010 hurt lots of Ozarks dairy producers. Success right now means still being in business. Producers sitting on home-grown forage inventories will feel more successful this winter as cash flow improves.
How is the raw milk movement affecting the dairy industry?
Not much. The raw milk movement is mostly a media story with little impact upon the economics of dairying. Some dairy producers are picking up cash selling raw milk off the farm. The potential product liability of selling raw milk makes this business venture risky for dairy farms with assets to protect.
If producers look to raw milk production, what notes of warning would you offer?
Producers selling raw milk directly off the farm are within the law in Missouri. If they are also selling bulk milk through a cooperative, producers need to understand that they may be violating their coop’s milk supply contract.
