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.
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