What is in this article?:
- The likelihood of another perfect storm challenge to the dairy industry from Mother Nature – particularly in the drought arena – is unlikely to be repeated. But at the same time, recovery for a troubled industry, shredded by the drought and high costs for feed, isn’t likely to come any time soon.
Survival of the fittest
Even with extensive culling of herds last year, “there are still a lot of cows out there,” he said.
Milk per cow continues to rise, Karlin said.
Despite pleas from some California producers, he said, the California Department of Food and Agriculture has been unwilling to alter the milk pricing formula. Some producers, he said, “feel let the chips fall where they may, it’s survival of the fittest.”
Consumers are unlikely to sympathize with the dairy operators, he said, partially because they’re facing tough economic times as well.
And there is intense competition from foreign competitors, he said, including Australia, New Zealand and the European Union “with the Ukraine and Brazil waiting in the wings that are going to be powerhouses in a few short years.”
Karlin said any hope of enhanced profitability is going to come “on the heels of much lower feed costs as opposed to any sustained increase in milk prices.”
Corn prices remain a volatile concern, Karlin said, noting they could range — depending upon weather conditions — from $4 to $9 for a bushel.
Karlin drew some comparisons between human, crop and cow comfort when it comes to heat.
“Does anyone like to go out and have sex when it’s 110 outside?” Karlin asked.
“Sure,” said one audience member to a round of laughter.
“Freak,” Karlin joked.
His point: “People don’t want to go out and have sex when it’s super hot. Neither do cows. Neither do corn plants. And last year during pollination in the Midwest, temperatures were 100 to 110 degrees the first week in July. Basically corn stops growing at 86 degrees. So there was no pollination. It just burned the silk right off those plants.”
While rainfall is important, he said, temperatures are key.
Among the effects: smaller-sized ears.
“If you went out to the Midwest,” Karlin said, “you’d see smaller ears. Something you’d see in a Thai restaurant.”
Last year, for only the fourth time since 1866, U.S. corn yields fell for the third year in a row, Karlin said. The last time that happened was 1928-30. In those three years ending 2012, the U.S. lost close to 5.4 billion bushels of corn
Timely rains would be needed to push soil moisture to desired levels, Karlin said.
During the recent drought years, Karlin said, corn acreage has moved north and west. States where production increased include North and South Dakota and Kansas. Soybean plantings are also moving north and west, he said.