Dairy farmers

greg oliver · Feb 9, 2014

I saw a news story that US is exporting more cheese due to world wide milk shortage. I was wondering if anyone has started looking at new tractors with the big checks that will be coming?!?! I talked to dairy farmer last night, he said price per hundred weight is close to last year at this time (Class I = $23/hundred weight). My wife says the price of cheese has increased all year at the stores. I guess I will have to get rid of my horse and get a family cow. Just kidding! Greg

rrlund · Feb 9, 2014

I don't think the price of milk and cheese could ever get high enough for me to milk cows again. 33 years was long enough.

Gambles · Feb 9, 2014

Growing up on a dairy farm, Amen to that. I did see that the local Aldi store has jacked up the price of milk from $1.99 to $2.49 and as of yesterday, $3.00 a gallon.

Bret4207 · Feb 9, 2014

I am not a dairyman, but many of my neighbors are. Here's the ting about "the BIG bucks"- According to my neighbor, in 1075 he was getting about $11-12.00 cwt. for milk. Now he gets about $19-20 depending on the month. His milk price hasn't even doubled, yet most everything else is 4-25 times more expensive.

What big check?

john in la · Feb 9, 2014

First off you can not compare the price of milk in the store and the price of milk paid to farmers because they are dogs of a different color.

This is because the price dairy farmers are paid for their milk is effectively set by the federal government. Historically, the government has set the farm-level price of milk at or near the cost of production, as a means of encouraging efficiency in the production of milk. With corn; land; fuel; ect prices were they are $23 milk is cheap.

On the other hand bottling plants and stores can charge what the want since the milk commission retail price controls went out the window years ago. I can remember reading a few years ago about some northeast states (Conn; NH; Mass) wanting to bring back retail price controls not to raise the price of milk but rather to try and stop price gouging.

farmerwithmutt · Feb 9, 2014

interesting i work in a goat cheese factory and depending on the time of year at least half and sometimes more of the cheese comes from europe . it comes in from spain mainly but i have seen other labels float by. its one of the fun jobs what your supposed to do is it comes in as 40 lb blocks of frozen cheese yes i know cheese cant be frozen but for what this is and used for it can ok you dig them out frozen and dunk them in cold water and sanitizer then throw them up on a rack to defrost ever throw a 40 lb wet frozen block in plastic on steel ? when you miss and it keeps on going thats when the fun starts .after its thawed its mixed with fresh cheese then made into a soft cheese walmart aldis has it for sale.
friend is now on route for grass only milk

Dachshund · Feb 9, 2014

Glad we have our own cows! Another just freshened last night. Also - why CAN'T you freeze cheese? My wife makes cheese at home and freezes it all the time. Thawed out, it tastes just as good as fresh....and there is nothing better than home-made butter!

farmerwithmutt · Feb 9, 2014

my thought to look at your next pizza. but a lot of guys think of swiss colby the hard cheeses and those are better if not frozen.
some cheese will get crumbly if frozen

Anonymous-0 · Feb 9, 2014

If you think milking cows is the way to prosperity go ahead and try it, my Dad dairied for 40 years until 1999, we got by but didn't get rich with feed, vet and equipment repair bills, I let the calves milk the cows now.

Anonymous-0 · Feb 9, 2014

A dairy farmer friend was pretty sharp with numbers. One day was grumbling about his costs of dairying. He told me he knew his breakeven point was around 15.00. This was before the historic rise of corn price couple 2-3 yrs ago. (Corn has since retreated and milk price has advanced since)He never said he made any profit just knew when he was breaking even. Still in dairy business but they work really hard at it, bunches of hours labor,some hired .He used really old tractors equipment for silage & grew own feed. Every operation is different.

JD Seller · Feb 9, 2014

A good friend has 800 cows that his family milk. Just a few years ago when feed cost went sky high and milk price was in the mid teens he told me he was losing $100,000 each month. So it is going to take a long time of higher prices for him to get back to even.

The livestock sector took it on the chin these last years as the grain prices where high. I know of guys that lost just about all of their equity and are back to almost 1980 levels of debt to asset ratios. I don't know how a lot of them are going to survive. They are old men now with a lot of debt. Plus a lot of them just held on with the bank lending against their land at the current values. I really think the farm land prices are on a bubble just like homes where 6-7 years ago. So what happens if the farm land values drop back to what they where 4-5 years ago???

Also over the years I sold equipment high milk prices did not see the dairy guys going wild on new iron like the higher grain prices do. The dairy guys usually update some of their equipment but add cows and barns during high milk price times,if they are not playing catchup.

rrlund · Feb 9, 2014

One thing you have to look at in that equation though is genetics. He's getting SO much more milk per cow now. If you figure twice as much milk per cow now,it erases that 4-25 times more expensive thing.
I remember back in the early 70s a guy down the road having a 16,000 pound herd average. That was unbelievable production at that time. Everybody wondered how he did it and wanted to buy heifers from him.
Now,30,000-32,000 is common. If you have less than a 24,000 pound average you're most likely in the bottom third.

Anonymous-0 · Feb 9, 2014

Been milking cows for over 34 years now. These YTmag discussions on dairy farming are always entertaining.

Geo-TH,In · Feb 9, 2014

Keep your horses, Milking cows is a 24/7/365/2 times a day job.

LAA · Feb 9, 2014

If they are old men now with a lot of debt then it is obvious they got older but failed to get smarter. At no time in human history have agricultural enterprises been able to support long term extensive debt by commodity sales alone, no other commodity dependent business can do it either, oil and gas, coal, timber, all are dependent on cash flow and when prices drop things get tough in a hurry. A value added enterprise is a different thing altogether. It is actually good for the overall market when poor managers go belly up because opportunities are created for others.

Tom OConnor · Feb 9, 2014

I milked cows for a long time growing up and saw my Mother work harder than any man after Dad passed away for many years. They provided a living for the family but never was so glad to see anything as the last load of cows go down the road. Had a neighbor who went nineteen years with out missing a milking. I don't know if that was a record but didn't see anything about it on his marker when the gentleman passed away. Dairy products will have to get very high before the thought of buying a cow will cross my mind.

JD Seller · Feb 9, 2014

LAA: I agree with what your saying. I have noticed that many farmers fall in to the same trap as everyone else. Doing the same thing over and over hoping that this time it will work better.

Plus a lot of dairy guys are set in their ways. They are doing much the same type of milking they did 30 years ago. Many refuse to even think about a parlor even when their back/knee give out. I know the big fancy setups cost a mint but I have helped guys build their own for pennies on the dollar compared to the big new stuff.

The only constant in any business is change. You have to change as the fact dictate the need to do so. Many do not adapt and get lost in the shuffle.

rrlund · Feb 9, 2014

I know a guy who went to a parlor when his back and knees got bad,then he said the bursitis in his shoulders about did him in. The guy I talked about with the 16,000 pound average told me one time that nobody over 50 had any business milking cows. I laughed at him because I wasn't anywhere near 50. He was right.

Dachshund · Feb 9, 2014

My wife makes homemade pizza all the time - She even freezes the store bought stuff......Never noticed a difference....

JerryS · Feb 9, 2014

Same here, Tom. Prettiest sight I ever saw was a cow's tail....on that last cow getting in the trailer to leave our place.

JerryS · Feb 9, 2014

As another old dairy hand, what galls the snot out of me is to hear people b%tch when milk goes up 20 cents a gallon, when the same people think nothing of paying $2.00 for a pint of water or
$5.00 for a fancy cup of coffee. Most people are idiots.

730 virgil · Feb 9, 2014

i too have worked around dairy cows most of my life.
i noticed about age 50 most guys were ready to turn over to next generation get hired help or quit.
knees and back were worn out.
around here it seems robots are getting second and third looks for the people wanting to keep milking.

Alan K · Feb 9, 2014

I remember homemade butter....mmmmmmmmm...

valleview · Feb 9, 2014

Back in the day when people didn't get out much and were accustomed to working 24/7, dairying could be a good life, especially if it was a family project. Today, it just about has to be a mega-dairy business - very few are willing to work like the old days. With prices so high, they better pay off debts as tough times always seem to return, usually sooner rather than later.

greg oliver · Feb 9, 2014

My dairy farmer neighbor told me the Chicago board of trade has lowered cheese price as of Friday no big check coming. My post got some upset I was only making the point that price of cheese rose all last year while dairy farmers checks stayed the same. My grandfather, father & I were ALL dairy farmers. I retired early when my mother told me she couldn't keep taking money out of her savings to keep me farming that was twenty years ago. Greg

just another old geezer · Feb 10, 2014

I always say the same thing to people when they say how much money we are making. if you think we"re getting rich at it, buy yourself a farm and a herd of cattle and have at it.

formenwhogrow · Feb 10, 2014

Well said. Too many farmers are not smart enough to realize they're working themselves to death emulating a failing model. So many refusing to entertain the thought that it's their management practices and NOT the system that's failing. This seems especially true for dairy farmers. Lots of the guys in my area have painted themselves into a corner by not picking their head up out of the manure long enough to read the writing on the wall. 70 years ago their Grandparents set up an operating model that could not be sustained without cheap grain and fuel and now those operations are either out of business, slowly bleeding out, or have taken on huge debt loads to "modernize".
If anyone out there believes that the dairy industry needs smaller guys, just ask anybody that was a small-time hog operator 25 years ago if the hog "industry" misses them.

formenwhogrow · Feb 10, 2014

Yeeess, but as the Holstein breed has become bigger and more productive, the cow has become a much higher input animal to feed and house. Today's Holsteins don't fit in their old stalls, are more prone to lameness, and are harder to breed up than the lower producing cows of yesteryear. Higher producing cows eat more than lower producing cows, thus thinning out the argument that the higher production of the modern dairy cow outweighs the increases in costs.

Bret4207 · Feb 11, 2014

(quoted from post at 11:45:11 02/10/14) Well said. Too many farmers are not smart enough to realize they're working themselves to death emulating a failing model. So many refusing to entertain the thought that it's their management practices and NOT the system that's failing. This seems especially true for dairy farmers. Lots of the guys in my area have painted themselves into a corner by not picking their head up out of the manure long enough to read the writing on the wall. 70 years ago their Grandparents set up an operating model that could not be sustained without cheap grain and fuel and now those operations are either out of business, slowly bleeding out, or have taken on huge debt loads to "modernize".
If anyone out there believes that the dairy industry needs smaller guys, just ask anybody that was a small-time hog operator 25 years ago if the hog "industry" misses them.

Lotta truth in that. Farming is all about management. In fact it's almost ALL about management. We sit here are worry over little things and miss the big things entirely. It happens to most people in all types of farming.

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