Washington Dairy Producers Face Challenges In 2012

The USDA’s forecast of declining milk prices for 2012 came as no surprise to dairy producers here in the state, predictions had been pointing to that since last fall and as Jay Gordon, Executive Director of The Washington State Dairy Federation and a dairyman himself will tell you, what dairy producers do best, making milk, can add to the problem.

GORDON: Dairy producers are doing what they do when prices are good, they make more milk, and then we’ll probably do what we do when prices are low, which is make more milk, which tends to compound the problem.

With milk prices predicted in the $16 range this spring and the cost of production at $17 to $18 there is no doubt it will be tight for dairy producers.

GORDON: The cost of production numbers are not what they were five years ago. A lot of guys are telling me sixteen, eighteen bucks is bare minimum to break even and if we’re dropping down into the sixteen, seventeen dollar range it means some of these guys that are buying a lot of feed are going to start to go negative again. Last year they were able to make some money and pay back some of the equity that they lost in 08, 09, and 010. We’re making more milk but it’s coming at a struggle.

Other factors in addition to the high cost of feed also add to the mix.

GORDON: You’ve got Japan as usual buying a fair chunk of feed, and California is buying a fair chunk of feed and feed costs are up. And at this rate it doesn’t look like they’re headed back down so folks are trying to find farmland, trying to find dirt, grow their own feed, grow as much of it as they can.

Gordon talks about Washington legislation and dairy producers Monday.

I’m Lacy Gray and that’s Washington Ag Today on Northwest Ag Information Network.