7 options for dairymen in a tight market

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dairy cows in freestall barn
(Farm and Dairy photo)

Dairymen are hurting right now. (Read our Feb. 15, 2018, update.) Here are a few things that dairy farmers and dairy experts say can help during this time of low prices:

  1. Sell some equipment. If you need money now, you might be able to sell some farm equipment or machinery that’s not essential to your operation. There’s no use keeping something around if you’re not going to use it, especially if it is depreciating.
  2. Cull weak or under-performing cows. When your paycheck depends on milk production, you need a quality herd of cows that are earning their keep. Look at each cow critically and ask yourself if you could do better with or without her.
  3. Raise some calves as beef. Instead of selling your bull calves, you may be able to realize some profit by feeding them out as beef. This depends on your feed availability and your capacity to house and care for additional animals, but it could add some value to your operation, especially if you find a good market for the finished animals.
  4. Watch your margins. The key to being profitable is to know your numbers and watch your margins. The price of milk does not necessarily determine the profitability of your farm. Profitability comes down to your ability to manage feed, labor and other input costs. If you choose, you can sign up for the federal Dairy Margin Protection Program, which protects against catastrophic losses and allows producers to buy additional margin coverage.
  5. Convert to crop farming. While you may want to continue dairy farming, you might be able to reduce the size of your milking herd and use some of your land to raise cash crops. Unfortunately, crop prices are low, as well, but you might be more profitable by selling crops than selling milk.
  6. Take a second job. Working off the farm can be challenging, but the benefits of a second income can greatly improve your financial situation. You might even be able to secure a job with paid benefits, which can help mitigate the cost of health insurance and retirement savings.
  7. Speak up for trade. Let your federal lawmakers know the importance of global trade, and the importance of exports for dairy farmers. Dairy exports represented 14.7 percent of U.S. milk production in 2017 and equalled $5.48 billion, according to the U.S. Dairy Export Council.

 

 

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Chris Kick lives in Wooster, Ohio. An American FFA Degree recipient, he holds a bachelor’s in creative writing from Ashland University. He spends his free time on his grandparents’ farms in Wayne and Holmes counties.

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