Drought means Michigan dairy farmers face increasing costs
Despite recent rains, the 2012 drought — the most destructive in 50 years — has driven many Michigan dairy farmers into “survival mode”.
The dry weather reduced crop yields and tightened the feed supply, increasing the costs to farmers.
“The low crop yields make this fall truly a change in seasons for Michigan’s dairy farmers,” said Staci Garcia, the executive director of communications at United Dairy Industry of Michigan in Okemos.
Michigan had 5,164 licensed dairy farms in 1992. Today, the number stands at 2,100, according to U.S. Department of Agriculture.
The 5 counties with largest herds are Huron, Clinton, Sanilac, Allegan and Ionia.
Sheila Burkhardt, the director of member relations and public affairs at Michigan Milk Producers Association in Novi, said that many Michigan dairy farmers grow their own feed, and if they live in areas less affected by the dry weather, they are in a better position than farms that need to buy feed.
“Currently, most Michigan farmers that grow their own feed are still feeding last year’s crops. As this year’s crops are harvested, farmers will begin feeding the new crops sometime this fall or early winter,” she said.
She said farmers with reduced yields due to the drought “either have to buy additional expensive feed or reduce their herd size to match the crop yield.”
Annie Link, who owns two farms with 1,700 milk cows in Alto, is taking another approach.
“Cows are getting most of the energy from corn. Since we don’t have that much corn this year, we are looking for new sources of energy, for example, potatoes,” she said.
Nationally, milk production decreased in August from the prior year’s level for the first time in 31 months.
Production in the U.S. dropped 0.3 percent, compared to the same month a year earlier. But in Michigan, production increased more than 5 percent compared to a year earlier.
The Agriculture Department estimates that this year’s milk price will average $17.90 per 100 pounds. In 2011, the average milk price was $20.14. In 2010, the average milk price was $20.71.
Burkhardt said that although milk prices are increasing now, they have not kept pace with increases in feed cost. The margin between feed cost and milk price is so small that some farmers may sell cows rather than produce milk at a loss.
Link said that the reason for lower milk prices is decreasing market demand, especially in other countries.
“We should interact more with our customers to know their needs. Hopefully the price will come up if there are more demands,” she said.
Katie Dellar, a Harrisville farmer, wrote in her Day On The Farm blog, “The bad news is, there are too many who won’t make it through this year, families who are losing their livelihood because their crops didn’t grow at all, and neither did anyone else’s, so they have no way to feed their cows, and no choice but to sell them all, and that is heartbreaking.”
Garcia said that feed, energy, land rent and other cost increases make it hard to be profitable. Thus most farmers are losing money while a few are breaking even.
“The economic troubles of the last few years have caused dairy farmers to deal with dramatically higher feed and energy costs, and the drought now has pushed those costs even higher,” Garcia said.
Jason Jaekel, a regional representative at the Michigan Farm Bureau, said that he hasn’t seen farms in his territory going out of business or selling off their herds. His region covers Allegan, Barry, Ionia, Kent and Ottawa counties.
He said those farms haven’t been hit hard by the drought because they grow most of their own feed and have access to enough water.
In addition, he said, “Some of the farms in my region are adding value to their products, doing cheese, ice cream or organic milk.
We are expanding our products, and we see a very bright future in cheese and Greek yogurt,” Link said.