What is in this article?:
- Fiscal cliff? Dairy industry may already be falling
- Dairy blood bath coming?
- With the government setting a floor on the price of milk, U.S. dairymen are price-takers not price-makers. However, when that bottom-line price doesn’t cover the input and operational costs required to maintain a minimum profit it’s only a matter of time before their bottom lines begin to bleed.
Dairy blood bath coming?
Dairy producers’ plight has been evident for a long time, though. The awful drought is only “the straw that broke the camel’s back.”
There are more problems on the horizon, as well. An example is aflatoxin in corn from drought-hit regions. “We can’t feed that corn. Corn (prices) are at an all-time record high and they’re talking about them getting even higher,” said McCallister. “We were told to expect that aflatoxin-free corn will have a premium over normal corn.”
Dairy cows consume about 55 pounds of feed per day.
If McCallistercan locate diminishing feed, a MILC check won’t cover the cost, “let alone stay current on my bills. That’s the scary part. You know, $16 and $17 feed at the mill and we’re getting $17 to $19 milk. I know those not in agriculture may not understand that. But it doesn’t even cover the cost of buying the feed and the electric bill, let alone running the farm and keeping current.
“There are no answers. We’ve heard, ‘Well, you can get (Dried Distillers Grains, DDGs, a byproduct of ethanol production that can be used as feed). You can buy other things to get through.’ Right now, I’d be scared to death to feed my cows DDGs because of all the aflatoxin in the corn and the other stuff that goes with it. Besides that, (DDGs) is very limited and very (costly). We don’t even get enough in our MILC check to cover that kind of stuff.”
It’s an ongoing battle to stay afloat, says McCallister, who also laments the conditions for rural businesses tied to dairy. “We used to have three (dairy suppliers) in my county. There’s one left and he’s part-time. If you can catch him, he’ll be here to work. Otherwise, I have to go two counties over to get someone to work on our equipment. And we’re still the Number One county in Missouri in milk production. We’re declining rapidly.”
As for those charging the producers only want government hand-outs, McCallisterpushed back. “There’s not one farmer on (this call) that actually wants a subsidy. He just wants a fair price. … We’re not asking for a hand-out, a welfare check or anything else. But if the government is going to come in here and tell (consumers), ‘We’re going to keep costs down on food and give you low prices,’ then they’d better be standing in to help out during economic messes and droughts. It isn’t working!
“If the lame duck session or next Congress doesn’t immediately fix (this), we’ll have the biggest blood bath in dairy that you’ve ever seen.”