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Meeting Milk Price Challenges

Published: March 13, 2009
Source : University of Illinois ACES news
Milk producers are facing significant economic challenges this year, said a University of Illinois Extension dairy specialist.
"Milk prices at the farm gate will decline over 30 percent or $5 to $6 per 100 pounds," said Mike Hutjens. "In November of last year, the price per hundredweight was $19. By the end of this month, it may drop to $13.
"The reasons for this decline include the recession in both the U.S. and world dairy economies, a stronger U.S. dollar, a decline in eating out, and less export of dairy products."
Hutjens recommended five strategies for dairy managers to consider.
"By lowering feed costs, producers may be able to replace $1.50 per hundredweight of the price drop," he said. "Explore the use of by-product feeds to reduce feed costs with the target 9 cents per pound."
Maintaining milk yield and milk components is also important.
"Strive to increase quality premiums to increase returns," he said. "Finally, sign up for the Milk Income Loss Contract (MILC). It can provide $1.20 to $1.50 per hundredweight. For smaller herds with less than 120 cows, up to 2.9 million pounds of milk qualifies for the program support."
At the dairy case, consumers may see a price drop of 50 cents per gallon as dairy farmers receive 5 to 6 cents less per pound of milk--there are 8.6 pounds of milk in a gallon of milk.
"Cheese prices could also drop 50 cents a pound, and butter could decline $1 per pound," he said.
But, as he noted earlier, difficult times lie ahead for dairy managers.
"With today's current milk prices and input costs, Illinois dairy managers could lose $100 a month per cow," Hutjens said. "The average Illinois herd size is 102 cows representing over $10,000 loss per month.
"It may be this summer before milk prices increase and return to breakeven prices."
Source
University of Illinois ACES news
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Jeff Weisel
Chosen Acres Consulting, Inc.
4 de julio de 2009
I would suggest to go to John Buntings dairy blog to get the facts on what the goverment is doing and the corruption that is ruining our food industry in the usa. We need to price milk based on quality so we can start to fix our health care system
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Ramachandran Balagopal
27 de junio de 2009
Hello, The isssue is to be discussed in thread bear because the cost effecting on production will definitely have impact on profit margin.Primarily though the feed cost plays a major role(60[percent]),it is to be visualised from the other angle that is intercalving period.Above all the pracice of feeding Green fodder especially in India is to be indicated whemently to farmers community. The basic principle is to be sensitised in farming community (i.e) minimum of one cent fodder plot for every dairy cattle in order to redice the cost of production coupled with maitaining the inter calving period as low as 13-14 months. Ramachandran Balagopal
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Agus
25 de junio de 2009
Dear colleagues, I have same feeling and share the idea as expressed a colleague from Egyptian. In my opinion, the milk price is more influenced by the non technical issues rather than the technical things such as feeding, reproduction, breeding, health, management etc. The role of government or politicians in this issues is on my belief almost nothing. Price milk is almost governed by the global free trade liberalism. This is the impact direct or indirectly the global economy liberalization. Milk is one of the important food for human being in all of part the world. Producing good food is urgent to fit the huge demand of food for more than 6 billion people, including milk and milk products. Food must not be considered only as the trade material. Offering sufficient food to the world people is a must. In this point of view, the role of politician and government must be hardly demanded. Do not let the global capitalism control all of the things including the stomach of every people in the world. World must have food policy for all. Best regards Ali Agus GMU Yogyakarta Indonesia
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Mohamed Alnahrawy
Mohamed Alnahrawy
14 de marzo de 2009
This is the most important topic facing the dairy producers nowadays, of course feed cost is the corner stone, but the question is HOW? Do we need to be more and more specific in ration formulations? In other words, do we need to formulate 6 rations instead of 3 for example? Do we need to feed cows according to every 5 liters deviation in milk production? Will we change these formulations for every 20 dollars increase or decrease in corn or soya prices? And what about the feed additives? Can we remove or still add others to improve performance? Back to the herd, can we keep the cow no. or we must elevate the culling edge over and over? Is the solution to feed cows like their first nature as before the second world war, only forages, just grazing? And will we wash out all we were built in improving genetics? AND THE MOST IMPORTANT QUESTION: WHAT IS THE BOTTOM LEVEL OF MILK PRICES AND WHEN? However, are the politicians controlling our earth now, are they still for a while? And what about the newcomers, will they like what we have now? FINALLY, ACCEPT MY BEST REGARDS TO OPEN THIS TOPIC.
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