Strategy

[Jogeephus]

Anyone have any ideas on the best strategy to overcome this hump? I bought milk at the grocery store last week for $1.50/gal. which just seems wrong.

 

[Caustic Burno]

Anyone have any ideas on the best strategy to overcome this hump? I bought milk at the grocery store last week for $1.50/gal. which just seems wrong.

How? That is less than half price here at Wally World.

 

[callmefence]

Get ya some a them thar food stamps.
You won't even notice prices high or low.

 

[Bigfoot]

I sure feel sorry for the dairy guys/gals.

 

[slick4591]

Organized buy outs on dairy farms. You'll soon see Wal-Mart as one of the tops in milk distribution.

The start of it right here.

 

[Caustic Burno]

I don't understand dairy.

 

[Stocker Steve]

I don't understand dairy.

There is a new business model out there. Big industrial dairies are using it to expand in the mid west. It includes an operational recipe, an imported labor force, and a focus on ROE. These industrial dairies appear unstoppable, unless grain prices rally significantly.

 

[1982vett]

Anyone have any ideas on the best strategy to overcome this hump? I bought milk at the grocery store last week for $1.50/gal. which just seems wrong.

Dang....guess I should look at the gallon jug prices.....that's less than we pay for a half gallon. Don't see why I couldn't pour a 3 quarts down the drain rather than a quart as long as it's cheaper. We don't use a lot of milk around here. Waste more than we use.

 

[ez14.]

Strategy? Well in the dairy business we only have one strategy make more more more until the bank says your done

 

[TexasBred]

I don't understand dairy.

They're just like everybody else. If milk went up to $25 a hundredweight every dairyman in the country would be sitting at the bank in the morning to get money for more cattle. In no time the market would be flooded with an overabundance of milk and prices would tank again. they just can't stand prosperity.

 

[Jogeephus]

I don't understand dairy.

They're just like everybody else. If milk went up to $25 a hundredweight every dairyman in the country would be sitting at the bank in the morning to get money for more cattle. In no time the market would be flooded with an overabundance of milk and prices would tank again. they just can't stand prosperity.

Texbred, why you wanna go stepping on toes? :lol2: I was looking for a better solution ...... something like a bigger trailer maybe. Seriously though, I'm thinking herd reduction might be the answer right now. With this you won't bleed out so fast.

 

[Stocker Steve]

Seriously though, I'm thinking herd reduction might be the answer right now. With this you won't bleed out so fast.

Great point. With DHIA records, it is pretty easy to figure out that a full barn can work against you at below cost prices. Now if beef producers did this...

But, figuring out your breakeven won't change that dairy is going industrial just like chickens and hogs did.

 

[Jogeephus]

Seriously though, I'm thinking herd reduction might be the answer right now. With this you won't bleed out so fast.

Great point. With DHIA records, it is pretty easy to figure out that a full barn can work against you at below cost prices. Now if beef producers did this...

But, figuring out your breakeven won't change that dairy is going industrial just like chickens and hogs did.

Though it might be too late I've always thought the purchase of a pasteurizer and direct marketing farm to table might be a solution but at the moment existing contracts prevent this but where there is a will there is a way.

 

[Craig Miller]

I think my milk cost have just gone up.

 

[TexasBred]

Seriously though, I'm thinking herd reduction might be the answer right now. With this you won't bleed out so fast.

Great point. With DHIA records, it is pretty easy to figure out that a full barn can work against you at below cost prices. Now if beef producers did this...

But, figuring out your breakeven won't change that dairy is going industrial just like chickens and hogs did.

Though it might be too late I've always thought the purchase of a pasteurizer and direct marketing farm to table might be a solution but at the moment existing contracts prevent this but where there is a will there is a way.

Got a few operators scattered around the county here marketing their milk to some of these amish/mennonite type communities. They make mostly cheese and butter but some actually bottle and sell raw milk. They pay the milk producer over twice the price the regular milk coop is now paying so it's a good deal for both. One dairy delivers them about 20,000 lbs. a day. The others I'm aware of are smaller. Not aware anyone capable at this time of producing Grade A milk for sell in grocery stores, etc.

Steve one question. Those "industrialized" dairies you mention. How is their milk priced and to whom do they sell it or do they handle and process it from the cow to the home refrigerator.

 

[Stocker Steve]

Industrial diaries ship so many tankers per day that they have to have their access roads upgraded in many cases, and their continued expansion has filled processing capacity. Now there is a waiting list to have milk picked up...

We used to have a coop owned grade B butter plant. Many towns did back in the old days. Now cheese is the most popular product to produce. I assume this is due to shipping costs from flyover country.

 

[cbcr]

There is no question that the dairy industry in in dire straits. Many are seeing their cost to produce the milk is higher than what they are receiving.

Dean Foods just earlier this month put over 100 dairy farms on notice in PA, KY, TN, OH, and IN that they would no longer take their milk June 1. Other processors have already said that they cannot take on any of them. So these producers are scrambling and trying to figure out what to do. Some are throwing in the towel and selling their herds.

It is a shame that the small family dairy farms are about to become a thing of the past.

 

[Son of Butch]

Anyone have any ideas on the best strategy to overcome this hump?
I bought milk at the grocery store last week for $1.50/gal. which just seems wrong.

Yes, tip your local dairy farmer.
Local Creamery enclosed suicide hotline phone # with dairy farmer's milk check last month.
(No joke) neighbor said At first he thought it was a prank when he opened his.

 

[Son of Butch]

Great point. With DHIA records, it is pretty easy to figure out that a full barn can work against you at below cost prices. Now if beef producers did this...

But, figuring out your breakeven won't change that dairy is going industrial just like chickens and hogs did.

Though it might be too late I've always thought the purchase of a pasteurizer and direct marketing farm to table might be a solution but at the moment existing contracts prevent this but where there is a will there is a way.

Got a few operators scattered around the county here marketing their milk to some of these amish/mennonite type communities. They make mostly cheese and butter but some actually bottle and sell raw milk. They pay the milk producer over twice the price the regular milk coop is now paying so it's a good deal for both. One dairy delivers them about 20,000 lbs. a day. The others I'm aware of are smaller. Not aware anyone capable at this time of producing Grade A milk for sell in grocery stores, etc.

Steve one question. Those "industrialized" dairies you mention. How is their milk priced and to whom do they sell it or do they handle and process it from the cow to the home refrigerator.

In addition to economy of scale... (I know of one that owns a creamery)
they get a substantial premium for volume delivered... which is set so high others can't qualify for it.

With a volume premium, they never get hit as hard by a downturn and bcs they're always running full steam there is
never a lag time to gear up to capitalize on any market uptick. It all adds up to their bottom is never as low and their highs are always higher than other competing farmers.

 

[Son of Butch]

The only way for a smaller farm to compete would be some sort of a Quality premium with standards so high the
'industrialized' dairies would be unable to meet the requirements. (Grass Fed Butter?)

But so far the market place has been unwilling to pay a Quality premium large enough that would allow smaller farms
to compete. Consumer backlash on what is considered a consumer staple is just too great to pay Quality premiums large enough to matter.

Bottled milk cheaper than bottled water makes me sick.