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"Voluntary" cutbacks

LoveMoo11

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Apparently one of our state's larger organic milk companies, which has contracts with 22 organic producers, sent out a letter asking producers to cut their production back 10-20% due to a decreased market, increasing that their contacts may be in jeopardy if they don't comply. This loss will probably equal $10,000 or so per month due to estimates. I thought the organic market was going to be relatively safe from the troubles we have been having (at least in our state) with dropping milk prices but I guess not. The dairy industry is going down the drain, unless of course you have a thousand cow dairy. :frowns: :|
 

bigbull338

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good for the company.doing something to keep the farm price up to their producers.its not hard to comply with that request.because every dairy has low end cows they can cull.
 

FarmGirl10

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LoveMoo11":27ueyis0 said:
Apparently one of our state's larger organic milk companies, which has contracts with 22 organic producers, sent out a letter asking producers to cut their production back 10-20% due to a decreased market, increasing that their contacts may be in jeopardy if they don't comply. This loss will probably equal $10,000 or so per month due to estimates. I thought the organic market was going to be relatively safe from the troubles we have been having (at least in our state) with dropping milk prices but I guess not. The dairy industry is going down the drain, unless of course you have a thousand cow dairy. :frowns: :|
Not true, we have a 2,500 cow dairy up the road. It's not doing to well right now.
 

LoveMoo11

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I agree with farm girl-they have recently cut a lot of milk funding in our state and people are struggling. Most of our organic farmers are small, 50-200 cows, not thousands.
 

bigbull338

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the tough no nonsense people will always keep milking cows no matter what.im 1 of those people.but the family decided to sell the milk cows.an i couldnt hold up to milking 12hrs a day an doing the outside work.
 

novaman

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I agree with bigbull all the way around. Cutting back production is probably going to help more than hurt. Remove some of the less efficient producers and keep only the cows that are paying their way. Yeah times are tough but nothing is impossible with the right frame of mind. I think too many people got spoiled with the good prices we had for that short while. It was only a matter of time when this crash came and anybody who believed the good prices would last was living in a fantasy world. By the way, I believe the organic market is harder hit than the non-organic as the organic is more costly to the consumer. There may be some who will only use organic but I believe there are many who would convert back to the cheaper non-organic milk. Just my thoughts.
 

LoveMoo11

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I agree with you that the organic guys are getting hit harder-I didn't think the organic market would be affected the way people were talking but now people are switching back to "regular" milk with the hard times. I guess its good for the company to cut "inefficiencys" but its just putting people out of business. It costs more to farm then the money they are making. Its get bigger or get out all over again.
 

TexasBred

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LoveMoo11":2mnhdjfh said:
Apparently one of our state's larger organic milk companies, which has contracts with 22 organic producers, sent out a letter asking producers to cut their production back 10-20% due to a decreased market, increasing that their contacts may be in jeopardy if they don't comply. This loss will probably equal $10,000 or so per month due to estimates. I thought the organic market was going to be relatively safe from the troubles we have been having (at least in our state) with dropping milk prices but I guess not. The dairy industry is going down the drain, unless of course you have a thousand cow dairy. :frowns: :|

The more cattle you milk the more money you lose and the faster you hear that sucking sound of the drain. :cry2:
 

dun

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TexasBred":3hkpwk6v said:
LoveMoo11":3hkpwk6v said:
Apparently one of our state's larger organic milk companies, which has contracts with 22 organic producers, sent out a letter asking producers to cut their production back 10-20% due to a decreased market, increasing that their contacts may be in jeopardy if they don't comply. This loss will probably equal $10,000 or so per month due to estimates. I thought the organic market was going to be relatively safe from the troubles we have been having (at least in our state) with dropping milk prices but I guess not. The dairy industry is going down the drain, unless of course you have a thousand cow dairy. :frowns: :|

The more cattle you milk the more money you lose and the faster you hear that sucking sound of the drain. :cry2:

A number of the smaller dairys around here are now having to have either the wife or husband find an outside job. Cost of production is now too much more then what they're getting paid to continue as they are. Good producing cows are now in the 600-700 bracket and good sprining heifers in the 500 range.
 

bigbull338

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man its the right time to jump into the dairy business again.if i wasnt so busted up.an could do the milking id jump back into milking.
 

novaman

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bigbull338":3rv9w0f6 said:
man its the right time to jump into the dairy business again.if i wasnt so busted up.an could do the milking id jump back into milking.
I'm a bit curious about your comments. What makes this the right time to get into the dairy business? Not trying to be a smart guy but the milk price is still far below the cost of production. I'm doing everything I can just to work through this dip in the market. I can't imagine someone getting in right now. Sure heifers are selling more reasonable now but a thousand bucks is a thousand bucks, not to mention the cost of feed. If the market turns around relatively soon I would agree with you, but it seems as if it's going to be a long road back to profitable milk prices. A majority of the dairies that had been going in this area have said enough and quit. I have access to some bred heifers, but I can't justify borrowing money to buy more mouths to feed. So if you know something I don't, say milk prices exceeding 20 bucks by the end of the year, please let me know so I can move ahead with my expansion :D .
 

bigbull338

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weve been though all of the down cycles in the 70s 80s an 90s.an sold out 6 months before the cycle went back up.an when it went up the cows went from $1200 to $2000.an they was paying high an wide for the cows an heifers.so yes now is the time to jump in 80 cows now would cost $80,000 or less.but a man could tough it out.we made it though $9 feed an $10 milk before.
 

dun

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bigbull338":3amd3jr9 said:
we made it though $9 feed an $10 milk before.
The main problem it's more like $10 feed and $9 milk right now
 

bigbull338

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but it can still be done if your used to walking a tight rope.an besides change over to jersey or jersey Xs.an cute the feed from 20lbs a hd to 15lbs a hd.that way you can get 270lbs milk/100lbs of feed.
 

novaman

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bigbull338":2fyd4dml said:
but it can still be done if your used to walking a tight rope.an besides change over to jersey or jersey Xs.an cute the feed from 20lbs a hd to 15lbs a hd.that way you can get 270lbs milk/100lbs of feed.
I have no experience with Jersey but some people are saying they take far less feed. However, I've heard from just as many people that they are very comparable to Holsteins when adjusted for production. What have your experiences shown? The 2.7:1 on the milk to feed is getting right up there, don't you think? I was reading Hoard's the other day and there was an article saying the average right now is 1.69, the lowest since recording began.
 

TexasBred

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bigbull338":405jt599 said:
weve been though all of the down cycles in the 70s 80s an 90s.an sold out 6 months before the cycle went back up.an when it went up the cows went from $1200 to $2000.an they was paying high an wide for the cows an heifers.so yes now is the time to jump in 80 cows now would cost $80,000 or less.but a man could tough it out.we made it though $9 feed an $10 milk before.

Bull...only problem now is you have $12.50 or higher feed and $9.50 a hundred-weight mailbox price on milk. That's 82 cents a gallon to the dairyman. Milk checks at many dairies are not even covering feed bills, let alone all the other expenses. Dairies with NO debt are shutting the doors in this area every day or digging into savings just to keep current on bills.

Many good dairy cattle are being sold at packer cow prices so a fellow can't even afford to sell out.
 

bigbull338

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yes you got that right.but i guess if i could id still try to jump back in.but sooner or later the feed will have to come down.or people will find cheaper ways to feed the cows.or go to a grass based dairy.
 

TexasBred

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bigbull338":3upsvryj said:
yes you got that right.but i guess if i could id still try to jump back in.but sooner or later the feed will have to come down.or people will find cheaper ways to feed the cows.or go to a grass based dairy.

Grass fed has always been the cheapest way to produce milk. Most people just want MORE milk than grass will typically make. AND it requires more acreage.
 

dun

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TexasBred":3dny016w said:
bigbull338":3dny016w said:
yes you got that right.but i guess if i could id still try to jump back in.but sooner or later the feed will have to come down.or people will find cheaper ways to feed the cows.or go to a grass based dairy.

Grass fed has always been the cheapest way to produce milk. Most people just want MORE milk than grass will typically make. AND it requires more acreage.

And better quality grass then a lot of people can grow. We had one old dairyman, now retired, that built his herd on fescue doing Holsteins. He did real well. Most of the people trying to run dairys on fescue lose their butts because the cows just don;t perform well unless they have the genetics for it
 

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bigbull338":24xxcbq2 said:
man its the right time to jump into the dairy business again.if i wasnt so busted up.an could do the milking id jump back into milking.

I've heard you say this alot on this site. If you loved it so much, why didn't you just buy the cows from your family, and hire help and keep on going?

I would not advise anyone in good conscious right now to get into the dairy business. Its a financial nightmare right now, and I don't care if you have a big herd or small, the struggle is on for everyone. The only ones I can see who aren't going to be drastically effected are the older farmers, who don't have morgtages and or a many other bills.

You will see a decline in dairies over the next 6 months, count on it.

Yet when I go grocery shopiing, icecream is still $4-5 for a half gallon, cheese is still $4-5 a lb, and milk has gone down maybe .70 cents. If you ask me something isn't right somewhere, someone is making a ton of money off of us dairy farmers, is it the milk companies, the stores? Who knows, but I think its crooked all the way around!

GMN
 

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