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Agriculture on the High Plains
No effects from USDA announcement for western Kansas yet
What it'll probably amount to based on estimates that some of the dairy economists have put forward is probably about 50 cents per hundred weight, which is about a five percent, four to five percent boost in the price they're getting now, which is still not sufficient enough to help them meet the cost of production.
Four or five percent isn't a big help if you're selling your milk for 30% below the cost of production as Bodenhausen says most farmers probably are. Of course, there are farmers that aren't selling that low, perhaps because they had forward contracted feed purchases at a favorable time or contracted the price for their milk, like Ken McCarty did.
We had some fairly favorable feed contracts in place at the beginning of the year and we also hedged about 50% of our milk, so our blended price even giving the pretty awful market conditions right now has been somewhat favorable.
McCarty and his family run McCarty Dairy in northwest Kansas, with locations in Rexford and Bird City. They milk about 3400 animals total. Not all farmers are faring as well as McCarty. When I visited Lakin Dairy in southwest Kansas, owner Fred Ritsema said the impact of this dairy crisis is visible in the area.
Well at least here in swks you probably noticed there's probably at least half of the dairies not having cows on them anymore. So altogether they didn't really go broke, but there's some dairies that went in the buyout and some dairies that just sold their cows, and are trying to rent their place and can't find no new people to fill their place with cows. So yeah there's quite a bit of dairies vacant right now. So here in swks we certainly don't do good.
Ritsema has been running the Lakin Dairy since 1997 and has previously run dairies in Texas. He views this crisis in terms of the last several years.
Well, it's a tough year, but I mean I gotta say in all honesty when you take the five years we just had I mean altogether it was five pretty good years. But this year we're giving back a lot of the profits we've made in the last four years back. Like now we're getting below ten dollars when our breakeven is something like thirteen dollars or fourteen dollars. So out of all of the milk money that comes in about 30 percent of that is a loss. So, yeah, you lose tremendously right now.
He says with school starting prices should get a little better just because of the season. Ritsema says they began to see below breakeven prices back in January, and Bodenhausen of the Kansas Dairy Association says prices really dropped in March and there's been no recovery since then. Ritsema says farmers that are highly leveraged are in trouble, his farm has a fairly low debt load. Even with a low debt load it doesn't make up for the really low prices. When it gets below breakeven farmers begin killing off lower end cows.
I think this year alone I probably killed also fifteen percent more of my herd than I normally do, because when normally a cow is still making you some money with forty pounds, right now a cow with forty pounds doesn't make you any money either, so she needs to leave already, even when she's down to forty pounds, when normally, in a good year, a cow can stay here even when she's still giving 25 pounds, so there's quite a bit difference, so you're killing quite a bit more aggressively.
He has a herd of 3000. In a normal year about 1000 are killed. Ritsema has had to kill an extra couple of hundred so far this year. He predicts by the end of the year the U.S. will have 20 percent fewer cows. As to the USDA raising dairy support prices he says it can only help. Bodenhausen with the Kansas Dairy Association says there could be a little bit of price rebounding in the next two months. In the end he thinks the marketplace will just have to correct itself. I'm Lindsey Fields, HPPR news.
© Copyright 2012, hppr
(2009-08-25)
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GARDEN CITY, KAN.
(hppr) -
A helping hand from the U.S. Department of Agriculture won't do much to help struggling dairy farmers. At the end of July Secretary of Agriculture Tom Vilsack announced that the USDA will be paying more for nonfat dry milk and cheddar between August and October, which should help raise the price that dairy farmers receive for their milk. Mike Bodenhausen, the executive director of the Kansas Dairy Association says producers probably won't see the effect of the price supports until late September or early October.
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What it'll probably amount to based on estimates that some of the dairy economists have put forward is probably about 50 cents per hundred weight, which is about a five percent, four to five percent boost in the price they're getting now, which is still not sufficient enough to help them meet the cost of production.
Four or five percent isn't a big help if you're selling your milk for 30% below the cost of production as Bodenhausen says most farmers probably are. Of course, there are farmers that aren't selling that low, perhaps because they had forward contracted feed purchases at a favorable time or contracted the price for their milk, like Ken McCarty did.
We had some fairly favorable feed contracts in place at the beginning of the year and we also hedged about 50% of our milk, so our blended price even giving the pretty awful market conditions right now has been somewhat favorable.
McCarty and his family run McCarty Dairy in northwest Kansas, with locations in Rexford and Bird City. They milk about 3400 animals total. Not all farmers are faring as well as McCarty. When I visited Lakin Dairy in southwest Kansas, owner Fred Ritsema said the impact of this dairy crisis is visible in the area.
Well at least here in swks you probably noticed there's probably at least half of the dairies not having cows on them anymore. So altogether they didn't really go broke, but there's some dairies that went in the buyout and some dairies that just sold their cows, and are trying to rent their place and can't find no new people to fill their place with cows. So yeah there's quite a bit of dairies vacant right now. So here in swks we certainly don't do good.
Ritsema has been running the Lakin Dairy since 1997 and has previously run dairies in Texas. He views this crisis in terms of the last several years.
Well, it's a tough year, but I mean I gotta say in all honesty when you take the five years we just had I mean altogether it was five pretty good years. But this year we're giving back a lot of the profits we've made in the last four years back. Like now we're getting below ten dollars when our breakeven is something like thirteen dollars or fourteen dollars. So out of all of the milk money that comes in about 30 percent of that is a loss. So, yeah, you lose tremendously right now.
He says with school starting prices should get a little better just because of the season. Ritsema says they began to see below breakeven prices back in January, and Bodenhausen of the Kansas Dairy Association says prices really dropped in March and there's been no recovery since then. Ritsema says farmers that are highly leveraged are in trouble, his farm has a fairly low debt load. Even with a low debt load it doesn't make up for the really low prices. When it gets below breakeven farmers begin killing off lower end cows.
I think this year alone I probably killed also fifteen percent more of my herd than I normally do, because when normally a cow is still making you some money with forty pounds, right now a cow with forty pounds doesn't make you any money either, so she needs to leave already, even when she's down to forty pounds, when normally, in a good year, a cow can stay here even when she's still giving 25 pounds, so there's quite a bit difference, so you're killing quite a bit more aggressively.
He has a herd of 3000. In a normal year about 1000 are killed. Ritsema has had to kill an extra couple of hundred so far this year. He predicts by the end of the year the U.S. will have 20 percent fewer cows. As to the USDA raising dairy support prices he says it can only help. Bodenhausen with the Kansas Dairy Association says there could be a little bit of price rebounding in the next two months. In the end he thinks the marketplace will just have to correct itself. I'm Lindsey Fields, HPPR news.
© Copyright 2012, hppr
