The average person’s understanding of drought usually extends as far as his lawn. Oh, the sophisticated consumer might notice the relationship between drought and prices at the supermarket. But unless a person understands farming, they’re likely to see headlines like “Corn prices hit record as crops shrivel” and think, “Oh, that’s good. That means farmers will have a good year.”
As we know, that’s not the case for dairy farmers. Ag economists Daryll Ray and Harwood Schaffer from the University of Tennessee’s Agricultural Policy Analysis Center recently told the rural news web site DailyYonder.com that this year’s drought has been a “disaster” for dairies because of those high crop prices.
“If that income were spread evenly over all farming operations, one could sit back and heave a sigh of relief, after two months of worrying about the impact of the drought on farmers,” Ray and Schaffer write. “But as a look at the numbers show, the income is not evenly spread across all farms. As a sector, the value of livestock production decreased $0.2 billion from a year earlier. The big loss in value of production came in the dairy sector, which is forecast to see a decline of $4.3 billion (10.9 percent), while both meat and eggs are slated to see increases. Over and above changes in the value of production in the livestock sector, the USDA forecasts that the price of feed will increase by $7.2 billion (13.2 percent). That means that after taking feed costs into account, the livestock sector is forecast to see numbers that will be well below last year.”
Still, it’s only natural for consumers to be confused. After all, USDA’s late August 2012 Net Farm Income Forecast shows this year’s net farm income exceeding $122 billion, with net cash income exceeding $139 billion — both record highs thanks to the drought making crops more scarce and, hence, more valuable. It’s great news — unless you’re feeding livestock.
That’s the leap most consumers don’t make. They may recognize when the price of dog food rises at the grocery store, but they don’t connect high crop prices to high feed costs and, finally, to high milk prices.
And when consumers start seeing headlines like “Food prices 'to hit all-time high next year,'” they’re going to think dairy farmers are rolling in the dough when nothing could be further from the truth.
That’s why it’s important for every farming CEO to spend time each week educating the public, whether it’s by doing an interview with a local television station on the importance of milk in school lunches, talking with local retailers about what’s going on with dairy costs or blogging about the daily realities he or she faces. Today’s consumers are three or four generations removed from farming. We can’t expect them to comprehend what it’s like on the farm; we have to tell them, or live with the consequences of their ignorance. And since the per capita milk consumption number keeps falling, we can’t afford to give them any excuses to walk away from the dairy case.