Dairy industry turbulence could settle this year

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If feed prices fall or at least stabilize – as some market analysts are predicting – turbulence that has shaken the dairy industry for the past few years could subside in the second half of 2013, predicts Mike Schulz, Extension dairy specialist at Purdue University.

Schulz says feed prices remain the wildcard as to whether margins and cash flow can improve for dairies. Drought-induced high feed costs that resulted from last year’s growing season could stabilize once the 2013 crop is in the ground, he predicts. 

In the meantime, high feed prices and short supplies have forced some producers to cull cows. In October 2012, a total of 285,400 U.S. dairy cows were slaughtered under federal inspection – the highest monthly total since 1997.

Failure of congress to pass a new farm bill led to the one-year extension of the 2008 farm bill, which keeps the milk income loss contract program in place temporarily.

To navigate feed shortages in the short-term, Schulz advises producers to keep a close eye on feed prices and check inventories frequently. He also suggests growing additional forages that can be double-cropped. For example, sorghum-sudangrass, sudangrass or pearl millet can be sown in mid-May and will be ready for harvest in early July.

Read more of Schulz’ comments.



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