A one-year extension does not automatically mean that everything from the 2008 farm bill would be extended, Guidry said.
“There is a possibility that they can vote for a one year extension with amendments,” Guidry said. “While I haven’t heard anything related to that for dairy, I have heard that they could do an extension but still eliminate the direct payments to row crop producers.”
McCormick said it’s not just the lack of a farm bill that is hurting famers, it’s the high input costs they are facing.
He expects the number of dairy farmers in Louisiana to continue to decline as fewer young people are coming in to fill the void of the older farmers who are getting out of the business.
“It’s an uphill battle for young people to get into the dairy business,” McCormick said. “It would take $1.5 million-plus to get into a medium- or small-size herd.”
Many of the young potential dairymen realize that a dairy of fewer than 100 head can’t afford to hire any full-time help, so they will be stuck running the operation alone, McCormick said.
In addition to age, feed and other costs are also forcing many farmers to exit the dairy business.
“Normally feed cost should represent somewhere between 30-50 percent of operating cost, but now that number could be 60-75 percent or more of the milk check,” McCormick said.
Ethanol subsidies of about 45 cents per bushel for corn has had an effect on keeping grain prices high.
“But in addition to the subsidies, droughts in the Midwest and demand from other countries have also pushed corn prices higher,” McCormick said.
Before the droughts in Texas and the Midwest, growers were able to find substitutes for corn, but now demand is stronger for cottonseed hulls, corn gluten pellets and soy hull flakes.
McCormick said dairy farmers are now looking at the byproducts of the ethanol industry for feed, such as dry distillers grain, corn solubles and corn gluten.
What’s bad for dairy farmers is a good deal for the row crop farmers, he said. “We’re not jealous of them, and they weren’t jealous of us when we were making money.”
The price of milk traditionally goes up just before Christmas, and McCormick expects some Louisiana producers to take advantage of the high cow prices at that time to get out of the business.
“Between now and May 1 we could lose a lot of dairies,” McCormick said. “I’m expecting somewhere between 20-25 percent.”