The last five years have been difficult for dairy farmers, with many bearing the burden of rising input prices.
The last five years have been difficult for dairy farmers, with many bearing the burden of rising input prices. The COVID-19 epidemic and changing federal milk pricing rules are two of the most significant financial challenges affecting dairies.
According to Danny Munch, an economist with the American Farm Bureau Federation, dairy farmers are struggling merely to break even.
“So, according to the ERS–economic research statistics, dairy farmers lose over $6 per hundredweight on average, putting in about $27 a hundredweight and only receiving $21 a hundredweight on average.” “For small farms with fewer than 50 cows, that adds up to a loss of more than $20 per hundredweight,” he says.
Brad Heins, University of Minnesota Extension Dairy Specialist, has seen dairies diversify in order to boost profitability and overcome financial difficulties, such as adding dairy-beef production or on-farm processing.
“We’ve seen year over year increases in feed prices, whether it’s corn, commodities or lucerne, and it’s really affecting the bottom lines of dairy farms.” Milk prices have risen in several areas during the previous five years. But it’s softening again, so it’s really that feed milk balance on a daily farm trying to make it work economically,” he said.
The AFBG is assisting dairy producers with federal milk price reform.
