June 21, 2016
June is national dairy month, and while it’s typically a time set aside to rightly herald the benefits of a diet rich in milk products I thought I’d step back from the promotional side for a moment and include a bit of perspective.
Over the years I’ve observed many things about the dairy industry, learning along the way. I’ve gathered an understanding that milk is not produced in a vacuum in the sense that dairies have a significant effect on other farming operations.
For instance, at a recent gathering of an almond grower’s cooperative there were reports by leaders about the drop in almond hull prices and how that’s had an impact on that organization’s bottom line. Something that is good for the dairy producer – lower feed costs – does not meet with the same glee from those selling the products.
It’s no secret that milk prices to the dairy producer are in the tank and have been more times than not. I will likely never understand how dairy products are priced in this country and how the producers are paid for a perishable commodity they produce year-round. Nevertheless, I see a frightening trend in California and elsewhere that could have large ripple effects with other commodities.
Logic escapes my understandings of an industry that can consistently be paid well under the cost of production and still remain viable. How do dairy producers make it on $11/hundredweight (cwt) milk when it’s said to cost them over $18/cwt to make it?
Dairies consume two of the three products produced by almond farmers each year: the softer hull is fed to dairy cows as a nutritional source and the shell is used as dry bedding while we like to cut up the nut and put it on our ice cream.
What happens when the number of dairy cows in California is insufficient to consume what is projected to be a three-billion-pound almond crop in the next few years?
Perhaps there are enough cows elsewhere in the United States to absorb those increases in shells and hulls, but how do they get to Idaho, Wisconsin or New York in a financially feasible way? I know of at least one guy trying to find an economic way to haul almond hulls and shells to dairies in other states, but he tells me he hasn’t yet discovered it.
Then there’s the list of grains and forages grown for cattle feed. What happens to those markets as the dairy industry shrinks even more?
American farmers have done a great job of making efficient use of the various products grown to feed humans and livestock alike. The dairy industry is just once facet of a gem called “American agriculture,” yet its existence – like agriculture in general – has impacts on our national economy that oftentimes go unnoticed and overlooked, but nevertheless would be sorely missed if it were to vanish.
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