If I were a crop farmer instead of a cattleman I would be more than a bit upset by the “news” that the commodity traders and USDA are betting on the price of corn falling to $4.00 a bushel (basically 35% loss in crop value compared to the recent three years)—thus “saving” dairy’s bacon.
Yes—milk prices of $17-$18 base make it difficult to feed $6.00+ corn to dairy cows and be profitable. This presumes you are using a “corn starch energy based” feed ration. What higher corn prices have been doing is convincing foresighted dairymen to switch to “digestible fiber energy based” feed rations.
The total cost of producing milk is provably cheaper today when you make this switch.
Actually I am still a bit upset for corn farmers—given input costs for growing corn have doubled per acre in the time where we have adapted Roundup Ready and GMO seed technologies, promoted to us as a guarantee of higher crop yields and a solution to the soil/weed problems with continuous corn. As a dairyman who raises corn to feed animals, those higher input costs remain regardless of the external market price of your crop. There is no indication seed, fertilizer and sprays will cost less in 2013.
I think we need to remain proactive, and recognize that the subsidized crop days of the 1970s-80s-90s could be disappearing, and with it all the various price boosters to the moribund bottling side of dairy production. The future of profitable dairying will hinge on these facts:
(1) Successful cow fertility and calf survival are the two biggest contributors to dairy profitability.
(2) Higher milk volume yield per cow lactation is among the least important profit generators.
Keep using less corn energy, and replace it with forage fiber energy. This aligns with all the latest data relating to lower cost of production, better cow health and reproduction success.
For the corn energy you do produce, select varieties on its animal feeding value, not on the traits that make it undigestible enough to keep rats from eating in on its way across the ocean.
(3) Pursue multiple sources of income—avoid the pitfalls of monocultural agriculture.
Deacon calves can become higher value feeder calves from lower energy value feeds. Replacement cows sell for 2x to 4x the value of cull cows. Breed for more longevity.
Crop rotations and double cropping can lead to some salable crops not needed for feed, as well as improving the organic matter and water holding capacity of your soil and reducing the chemical loads needed to keep land productive.
(4) Select on future trends—not on past assumptions. Avoid the peer pressure that resists change.