Drought Reflected In Dairy Prices

With 2 billion bushels being dropped off the USDA crop report this last weekend, seventeen percent less corn estimated than had been in July, it comes as no surprise that feed prices for producers and food prices for consumers are going to go up considerably. Washington State Dairy Federation Executive Director Jay Gordon comments on the possible future affect this year’s drought will have on Washington dairy producers.

GORDON: You know, this one’s going to hurt. We’ve been through droughts in the Midwest before, but I don’t know if we’ve seen grain do this. I’m getting guys that are saying the feed bill just jumped unbelievable just between June and July, and we’re still seeing the tightening and things not relaxing.

This of course is reflected in the recent rebound of dairy product prices.

GORDON: The milk price is finally starting to head up. Some folks are finally starting to figure out that milk production across the nation is going to take a hit both immediate from the heat short term from these grain prices, but also all winter long with not only grain prices but hay, we’re hearing hay getting bought here in the Northwest and moved east. There’s a big void - they’ve gotta try and get feed back to the Midwest.

Gordon also says that those dairy producers who have some home grown feed will be in a lot better shape than the producers who are having to buy the majority of their feed, since future prices for lot feed is sure to be far more expensive than it already is.

The hot weather is also affecting South America, Australia and New Zealand which could have a positive impact on U.S. dairy exports.

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