milk prices

[tncattle]

I met a local dairy farmer today as I'm looking at renting a home from him and 15 acres. Anyway, he milks around 200 and made the statement that is milk prices were $16-$17 consistently he could make a decent living. I think he owns all his land free and clear as he's lived there since the late 50s. Just wanted to see what y'all thought.

 

[dun]

16-17 would be a profit price for most smaller dairys. A few years ago 12-15 wasn;t bad until the price of corn, diesel and fertilizer went through the roof

 

[novaman]

I haven't calculated lately but just off the top of my head my cost of production is in the $12 range so anything above that is profit. I've heard lots of dairyman talking about needing 16, 17, even 18 bucks to make anything. While I'm not going to say I wouldn't take that price, I certainly can't say that I would need that kind of money to stay in business. In fact I am hoping this price doesn't move upward to far or there will be plenty of producers itching to get the tank fuller in hopes of making more profit short term. Everybody thinks I'm crazy when I say that I wish milk would sit around $13-14 and stay there. History shows that this is a fair price, not being extreme either way. Yes corn,diesel, fertilizer is higher now than years past but if you apply yourself you can make it on $13 milk. I certainly don't support a government supply management program but I do wish producers would regulate themselves a bit. This would smooth the cyclical ride of milk prices. Alright I've rambled enough. Lets hear how crazy my thoughts are.

 

[dun]

I haven't calculated lately but just off the top of my head my cost of production is in the $12 range so anything above that is profit. I've heard lots of dairyman talking about needing 16, 17, even 18 bucks to make anything. While I'm not going to say I wouldn't take that price, I certainly can't say that I would need that kind of money to stay in business. In fact I am hoping this price doesn't move upward to far or there will be plenty of producers itching to get the tank fuller in hopes of making more profit short term. Everybody thinks I'm crazy when I say that I wish milk would sit around $13-14 and stay there. History shows that this is a fair price, not being extreme either way. Yes corn,diesel, fertilizer is higher now than years past but if you apply yourself you can make it on $13 milk. I certainly don't support a government supply management program but I do wish producers would regulate themselves a bit. This would smooth the cyclical ride of milk prices. Alright I've rambled enough. Lets hear how crazy my thoughts are.

I was referring to last year when prices went nuts. They're still too high but at least tolerable now.

 

[bigbull338]

you might could eek out a profit on $16 to $17 milk.but it would be dang hard paying for a new dairy setup plus the cows.milk prices should be a min of $20 to $22 year around.an that might give you some breathing room.

 

[TexasBred]

I met a local dairy farmer today as I'm looking at renting a home from him and 15 acres. Anyway, he milks around 200 and made the statement that is milk prices were $16-$17 consistently he could make a decent living. I think he owns all his land free and clear as he's lived there since the late 50s. Just wanted to see what y'all thought.

With no debt on RE, cattle or equipment, doing most of the labor himself he probably could make some money. I've always told "prospective" dairymen to do their cash flow projections etc based on $12 milk to be realistic. If you can make money at the price you should survive.

 

[GMN]

I haven't calculated lately but just off the top of my head my cost of production is in the $12 range so anything above that is profit. I've heard lots of dairyman talking about needing 16, 17, even 18 bucks to make anything. While I'm not going to say I wouldn't take that price, I certainly can't say that I would need that kind of money to stay in business. In fact I am hoping this price doesn't move upward to far or there will be plenty of producers itching to get the tank fuller in hopes of making more profit short term. Everybody thinks I'm crazy when I say that I wish milk would sit around $13-14 and stay there. History shows that this is a fair price, not being extreme either way. Yes corn,diesel, fertilizer is higher now than years past but if you apply yourself you can make it on $13 milk. I certainly don't support a government supply management program but I do wish producers would regulate themselves a bit. This would smooth the cyclical ride of milk prices. Alright I've rambled enough. Lets hear how crazy my thoughts are.

I was referring to last year when prices went nuts. They're still too high but at least tolerable now.

Tolerable for whom?

GMN

 

[GMN]

I met a local dairy farmer today as I'm looking at renting a home from him and 15 acres. Anyway, he milks around 200 and made the statement that is milk prices were $16-$17 consistently he could make a decent living. I think he owns all his land free and clear as he's lived there since the late 50s. Just wanted to see what y'all thought.

With no debt on RE, cattle or equipment, doing most of the labor himself he probably could make some money. I've always told "prospective" dairymen to do their cash flow projections etc based on $12 milk to be realistic. If you can make money at the price you should survive.

What dairyperson doesn't have some debt? Got to spend money to make money in this business, with times like we have had, many farmers have gone into more debt just to survive. Whoopie prices are coming up, but they will need to stay up, just for some to be able to catch up. I would like a simple explanation as to why prices have been so terrible and now have rebounded some just in the past month-whats the difference between now and say 6 months ago? Isn't it always the way it is, milk production decreases in fall/winter, then the price goes up, but when you are getting larger production in spring/summer the price is weak. I would much rather have a uniform price year round, than have a super low low, then a super high high, that just leads many to a false sense of security, and troubles along the way.

GMN

 

[TexasBred]

GMN I know several dairymen who have been debt free for ages. Most have been in the business all their life, lived very frugally and grown slowly over a long period of time. They will borrow money from time to time for major things like buying additional land but otherwise are debt free. Several have sold cattle to other folks and financed them which brings in additional income and some also lease some cattle or bulls from time to time. I know most things break or get expensive about the time you get them paid for but these folks are just very good operators.