A SPECIAL PRODUCERS’ REPORT OF AG ALERT ® CALIFORNIA Dairy & Livestock ®
Many California dairy farmers rely on grain feed grown in the Midwest, and they’re paying more to have it transported. To cut costs, some dairies have reduced their herd sizes.
Rising feed, fuel costs challenge state dairy farmers By Bob Johnson Inflation has the state’s dairy farmers facing higher feed costs that may only be sus- tained if milk prices also remain higher. Prices for corn, soy and alfalfa feed increased by double digits the first six months of the year.
“Corn is $380 a ton or so,” said Gerald Higginbotham, a Fresno-based dairy nutrition- ist who consults dairies in the Central Valley and the Central Coast. “I can remember when it was $180 or $200 for corn.” With other costs also rising, dairy farmers depend on milk prices remaining higher, he added. “Fuel costs have also gone up,” Higginbotham said. “Fortunately, the price of milk has covered the higher costs.” There is evidence that economic factors are already leading to a diminished supply of milk and other dairy products nationwide. “California milk production has been down year over year,” Sousa said. “U.S. milk production has been down four or five months in a row.” While there has been no widespread herd reductions in the state, some dairy farmers have trimmed herd sizes to reduce costs, Higginbotham said. “Some people who were overcrowded decided to be less overcrowded,” Higginbotham said. “You can cull cows that are not cost effective, but you should do that anyway.” Even before this year’s inflated costs for growing and transporting corn, California dairy farmers traditionally depended on grain feed brought in from out of state.
“Milk prices have been pretty decent; otherwise, it would have been a disaster,” said Paul Sousa, director of environmental services for Western United Dairies, whose members produce more than 75% of the state’s milk. Sousa, whose family has dairy farms in Stanislaus County, said, “We don’t know how long the prices will hold.” Corn prices averaged $350 a ton the first six months of this year, which was 23% higher than a year ago and 67% more than the five-year average, according to Wisconsin-based Blimling and Associates, a dairy consulting firm. Higher feed costs have dairy farmers culling animals that are not profitable. They’re looking for more affordable feed alternatives and hoping milk prices also remain higher long enough for them to hang on. California produces about 20% of the nation’s milk supply and dairy remains the state’s largest agricultural producer, with $7.5 billion in production in 2020. But California dairy farmers rely heavily on feed corn grown in the Midwest and shipped west, and that is getting costly.
See FEED, Page 12
August 24, 2022 Ag Alert 11
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