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Thursday, May 5, 2016

Dairy industry is evolving in Missouri

Wednesday, October 24, 2007

When I grew up on a dairy farm, 20 to 30 milk cows were considered as a large operation. Milk was picked up at the farm in 10 gallon cans. There were a large number of dairy producers.

As a result of growing up milking cows, I have continued my interest in dairy farming. However, the number of dairy farms has decreased, but the production has not necessarily gone down accordingly. Milk production per cow has increased and the number of cows milked on the dairy farm has gone up. In Vernon County during recent years the dairy industry has not had the role it once had in the agriculture economic.

The introduction of two large New Zealand dairies in the county in recent months has an influence on the numbers of dairy cows in the county. Observing their type of production along with others in the state a different method of dairy production has been introduced -- grazing dairy.

Recently, I had an opportunity, along with other retired extension personnel, to hear Dr. Tony Rickard, extension dairy specialist give a talk on "The evolving dairy industry in Missouri."

We have personally noticed an increase in the price of milk and other dairy products when we go to the grocery store. Tony began the discussion on why dairy prices are high. The domestic supply/demand balance does not explain the reason. The herds in 2007 are about the same as in 2006. Production is expected to increase by .8 percent -- long term, about 2 percent.

Tony said that there had been reports on TV and in the papers that the cost of milk products had gone up due to the higher cost of feed and other cost in the production. He emphasized that farmers do not set the price of their production.

They are the only ones that pay out retail prices for what they buy and do not decide what they receive for their products. There is a higher cost for quality forage as weather has been a factor in parts of the country.

There are record high prices for skim milk powder and whey due to rapidly rising world demand and production shortfall. It is unusual for this type of milk to demand such a high price. The Oceania and European Union have been a major factor. Record low value of the U.S. dollar has inflated world prices even higher. There has been an emptying of United States and European government surpluses.

The estimated milk prices for 2007 will be 35 to 45 percent higher than in 2006, with milk for cheese up 45 to 50 percent and milk for butter and powder up 55 to 65 percent, as a result of global effects on the market.

He discusses the competition that has developed in corn for feed and ethanol production. For the years from now to 2015 there will not be a significant rise in corn production. Ethanol production will be influenced by the prices. Gasoline has declined by 50 cents in the last 60 days to about $1.60. In 2006 it cost $1.36 to $1.40 to produce a gallon of ethanol. One large ethanol plant was being constructed in one of the northern states and the construction has stopped due to the cost of production and the market for the product.

Dairy farms have declined by 50 percent since 1954. Arkansas has less than 20,000 milk cows. He is seeing an increase in the number of dairy cattle in Missouri. Each new dairy farm has an economic impact. Each dollar will generate $3.4; it has a multiplying effect on the economic. According to the specialist, milk futures are down and there will a decrease next year with more milk being produced.

Grazing type of dairying has an advantage in profits with what is invested. He said that farming is a business, not a way of life. He discussed how the dairy operations are set up in New Zealand. It is possible for a young person to earn a major income if they stay with it over about 20 years, moving into ownership.

There are concentrated dairy farms in the area that work well. Regardless if they are concentrated or all grazers they all do the same thing -- just different. He suggested they need to think smarter, not work harder.

He also discusses the research that is being done on grass production and how to best utilize the grass that is produced. They need to have a balance of cool and warm grasses. He suggested that they cannot be crop farmers and dairy farmers and there is not one way of running a dairy operation.

When I was a kid, operating a dairy farm was relatively simple, but it is now a complex system.

For additional information about the dairying in Missouri contact the University of Missouri Extension.

Oops " One of the mistakes that a person should not do is to misspell a person's name, I made that error last week. It was brought to my attention that Helen Real's name was spelled Reel in part of the column, including the title. Real is correct. As important as Helen was in my life, that certainly was a significant error.

Leonard Ernsbarger
Leonard At Large