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Oct 19, 2017
A penny per hundredweight trumps a dollar per cow in 2016
For the country’s dairy farmers, there doesn’t appear to be anything “sweet” to anticipate in ‘16. On the contrary, slimming down production costs is essential. With a 4-year average total cost of production of $19.66 – which is already adjusted for bull calf and cull cow income –there is a yawning chasm between production costs and milk income per cwt.
Where to start slimming? First, let’s determine “what is”. What are the big players in the list of costs?
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Oct 19, 2017
How is your time best spent? Trying to cut expenses by a dollar per cow or a penny per hundredweight? For every hundred cows you milk, you will save $100 for every dollar you cut in production costs per cow. If each of those cows are putting 24,000 lbs. of milk in the tank each year, finding one cent per cwt in savings will save $240 per year. A penny per cwt. trumps a dollar per cow in 2016.
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Oct 19, 2017
During this year of financial challenges, it is easy to feel alone. Fact is, you shouldn’t. Dairy farmers and dairy support businesses you don’t even know are feeling challenged right along with you.
With the June Class III likely to settle around +/- $13.20 per hundredweight, the good news is that will be around 50 cents higher than May’s $12.76 Class III.
Currently, milk prices trading in the futures market for the rest of the year are looking more positive, although still below many farms’ full cost of production.
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Oct 19, 2017
Watching the national news Sunday evening — not something I get to do very often — a story came on about flooding in Iowa.
The clip showed a number of homes that were already flooded to the eaves. Heartbreaking.
Meanwhile, crews of citizens were busy filling sandbags and building dikes to protect areas that were projected to flood later this week as the river continued to rise.
While the story focused on the people in towns and cities along the rapidly rising Cedar River, as a dairy farmer you have to wonder what is happening in more rural areas.
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Oct 19, 2017
2016 will not go down as a stellar year for many farms in Ohio. It has been an equal opportunity year — not particularly good for dairy farms, crop, beef, swine, or poultry farms.
There have been multiple ways for it to be unstellar: wet weather, dry weather, low prices and noxious weeds.
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Oct 19, 2017
A tattered 1979 paperback edition of Webster’s New World Dictionary defines context as “-noun, the parts just before a word or passage, that determine its meaning.”
Hop ahead to 2016, and Webster’s on-line definition adds “the situation in which something happens: the group of conditions that exist where and when something happens.”
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Oct 19, 2017
Like 2016, 2015 was not a kind year for many Ohio farms. The Class III milk price averaged $15.80 per hundredweight (cwt). The Federal Order 33 Producer Price Differential added another 44 cents per cwt to the price received by farmers shipping Grade A milk (the majority of Ohio milk is Grade A,) resulting in an average statistical uniform price of $16.24 for the year.
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Oct 19, 2017
The December 2016 final milk check, which will be deposited in cash-starved farm checking accounts this week, brings some small relief to Ohio’s dairy farmers.
With the Class III milk price announced at $17.40 per hundredweight (cwt.), the negative 61-cent Producer Price Differential brought the Statistical Uniform Price (SUP) in at $16.79 per cwt.
The good news is that both the Class III price and the SUP were record highs for 2016. The bad news is that both the Class III and SUP were record highs for 2016.
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Oct 19, 2017
Exactly two years ago, we knew we were heading into a down cycle in the dairy industry following the major high of 2014.
How well each farm would fare through the coming years of substantially lower milk prices would be heavily influenced by the financial health of the farm going in. Cash or near-cash reserves would be tapped.
