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14 hours ago, 40FarmallM said:

 

Kieth Fink, Troy Dairy, and other dairy farmers, is there any future for family farmers to keep milking cows or is it beginning to look like the hog industry where the bigger the better and if your not bigger get out?

Good Morning, Friends,

Had I not been asked specifically, I would not have tried to answer that question because I don't feel qualified. I am not an industry insider, and probably not even that smart when it comes to doing what I do. I'm just a dairy farmer, along with my wife and four children, trying to make a living on our family farm. The farm has been a dairy farm, in our family since 1891, I believe. We milk about 50 cows now, and are raising about 35 heifers aged 1 week to two-year springer. We are still almost paying the bills because of my wife's off-the-farm teaching job. Why do we continue? Because I sure would like to keep the farm for my children, should they feel the calling....

Do small, family, dairies have a chance going into the future? It will be tough. Certainly if they are able to find a niche, probably marketing their own milk or milk products. But you would have to be in the right location, probably a near a higher population urban area. Even at that, I'm not sure you can go into that kind of venture with much debt. If you want to be that traditional small farm and sell to the cheese plant or co-op, I think prospects are slim. Too much milk, they say. Nobody wants to buy yours or mess with your small volume. As a small dairy, our biggest fear is losing our market. If that happened right now, it is very doubtful we could find another market for the little bit of milk that comes from a 50-cow herd. And there is no way we could afford the payments on what we would have to borrow to put in our own small-time processing equipment. We do have debt already. Profit margins, if they exist at all, are just too slim. If prices should climb to a point where I can make more money by selling more milk,  I won't be able to do it, initially, because our co-op has all producers on a quota.

To offer a snapshot of how the "experts" see the future of the dairy industry, I offer this video from Hoard's Dairyman.

 

Kind of depressing. I don't see anything that looks like what we know as the "Traditional Family Dairy Farm". Sadly, if the nation's dairy herd continues to consolidate on large, more efficient farms, and these farms are able and willing to sell the milk for much less than what a smaller farm could do, there will be no way for smaller farms to market their milk, and earn a living doing so. I guess I won't now worry about what they think will happen in 50 years. Unless I live to be 100, I'll be gone by then. I love my cows. Perhaps God will have me milking cows in heaven! No sick cows in heaven, No bad weather, and the farmer will not get tired and will feel no pain. Praise the Lord!

Now, to end this with some encouraging words - LOL- here is a comment I received just this morning via our Youtube channel. The channel bears my name, but the videos are made mostly by our oldest son, Hank.

The comment was titled "Heros"

"Just now watched a piece about fallen hero’s from helicopter crash last week in Iraq. Our son is MH 53 pilot, has served in Iraq and else where . Because of him, we have a connection with theses seven men and their families.It is that type of connection we have found with your son’s dedication to tell others about his farm and family. He no doubt has the support of his family and others. We have found that same connection with that special farm family in Wisconsin. They are serving their country as good citizens just as these others serve their country in uniform. We salute our military and that dairy farm family in Wisconsin."

Yes, it was addressed to our family in particular, but I'm confident the sentiments also go out to all farm families, so take heart, everyone.

Keith-

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We had our quarterly meeting today. The vet said that the way it's going that she feels there won't be any vets left to service what farms stay going. We are in a sparse area that is going to have less dairy within a certain amount of time. I am praying that we can/will continue to milk cows and be profitable enough to get by.

I think it is going to be worse for dairies on the east coast within the next year as the '80s was on the grain guys. I hope that I am wrong though. 

Big key is cost per hundred weight AND having an available market

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48 minutes ago, bitty said:

 

Big key is cost per hundred weight AND having an available market

But.....what can you cut?  Labor always wants/needs more.  Everything that jumped b/c of high oil prices necer went bacl down but fuel some.   Labor rates of custom guys and shops.  Equipment...man...crazy.  cost of living for my own family. 

Thats my thing now.  I really dont know what to cut to save anymore.  And if i cut it would be cents and really not do much.  Now this trade stuff.  If china (huge buyer) gets mad and dont buy.  No one will be able to stay.  We export 16% of US milk.  We need to cut 20% production  but then imports fly in.

Really thought provoking last few days if we should bag it.

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34 minutes ago, TroyDairy said:

But.....what can you cut?  Labor always wants/needs more.  Everything that jumped b/c of high oil prices necer went bacl down but fuel some.   Labor rates of custom guys and shops.  Equipment...man...crazy.  cost of living for my own family. 

Thats my thing now.  I really dont know what to cut to save anymore.  And if i cut it would be cents and really not do much.  Now this trade stuff.  If china (huge buyer) gets mad and dont buy.  No one will be able to stay.  We export 16% of US milk.  We need to cut 20% production  but then imports fly in.

Really thought provoking last few days if we should bag it.

I wasn't referring that those with much debt (like me) can cut hardly anything. I am just saying that the smaller guys can survive if they have a lower break even price. We looked at everything and tried to find stuff we to cut. Unless I win the lottery ( I don't play) it's going to be hard to get buy. 

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1 hour ago, bitty said:

We had our quarterly meeting today. The vet said that the way it's going that she feels there won't be any vets left to service what farms stay going. We are in a sparse area that is going to have less dairy within a certain amount of time. I am praying that we can/will continue to milk cows and be profitable enough to get by.

I think it is going to be worse for dairies on the east coast within the next year as the '80s was on the grain guys. I hope that I am wrong though. 

Big key is cost per hundred weight AND having an available market

Interesting you should mention that, Tim. We had the same conversation today. Our vet is 70 years old. Has been our vet since 1982. He has already cut back his office hours to 3 days a week, but remains on call 24/7 for farm calls. He does have 3 other small animal vets at the clinic, but he is the only large animal guy. When he finally hangs it up, that practice will no longer do large animal. Not enough herds left.

Talked also with our dairy field man today. He is 62 years old, and now fearing for his job, too. Our dairy is losing so many farms (but not cows...they all find their way to larger farms) there will soon be not enough work for all the field men. He and three others have a meeting at HQ next week. Change is scary, and sad.

Keith- 

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I know tim.  Talked with CIH saleman for min.  Sweating too....  Berries here spend $ in spring.  Said quietest season in 10 years.  Have employee stuff going on with guy leaving and another thinking he is boss.  Sighhh...why so dang hard to make a living growing/producing food for mankind?  Salesman is from IA and said his bro who farms had some scary stories of small.and mid sized bank already not renewing operating lines for crops.  How much longer can the consumers take advantage of the producers?

An tarrif news....ugh

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Kieth and others I appreciate the reply. I work for a farm equipment dealership and we went threw a pretty rough time our boss got us buckled down and looks like we might be threw it for a little while, only time will tell. 

What I've learned is the big guys don't seem to suffer on the outside, still buying new iron and trading on some used. I assume this is just the price of doing business on such a large acreage. Some of the smaller farmers I know I've seen some extra gray hairs come up but not a lot of talk. I see the dairies up in my FIL Minnesota neighborhood closing up and calling milking cows a done deal, will be interesting to see if they keep farming. I don't know the cow to acreage ratio it would take to make a living, IE "I need 100 cows and 320 acres to make my living" (I'm sure those numbers aren't right I honestly don't know how many acres it would take to feed cows and how many cows it'd take to make a living in normal years) but I'm sure the acreage converted to all row crop grain production acres will flood the market and make it worse on the crop farmers in the area...

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The thing is cows arnt really leaving. Just moving to larger farms. So at least in my mind the same acreage will be required to feed the cows, just it won’t be owned by the dairy. I don’t see how a 15000 cow operation could find the 45000 acres it would take to feed those cows. Around here that would be entire counties

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7 hours ago, Bdse25 said:

The thing is cows arnt really leaving. Just moving to larger farms. So at least in my mind the same acreage will be required to feed the cows, just it won’t be owned by the dairy. I don’t see how a 15000 cow operation could find the 45000 acres it would take to feed those cows. Around here that would be entire counties

We just went through an auction two days ago.

Some observations from me;

Cows are indeed going to slaughter based upon AGE of cow,NOT production. We had our best cows leave on the beef truck. One cow consistently produced 140 plus pounds of milk since freshening in the fall- BEEF- this was a cow you wouldn’t have known existed, NO health issues, No mastitis, nothing that would warrant her being culled EXCEPT for her age. Another example- a beautiful fresh older cow, she would be one of those cows you would build a herd from. Freshened in with 160 plus pounds of milk, not a blemish on her- beef? 

What a crying shame, simply because beef is worth more than a dairy cow! I’ve been in dairy my entire life, I have never witnessed this inversion, you could always figure buying a springer for a beef and a half to two beef cows!

Because of this no one is willing to take a risk( or perhaps the banks aren’t willing to take a risk) on mature cows.

 I’m estimating 1/3 of these cows were culled. Granted, some of them needed to be culled but I don’t know about a third of them.

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8 hours ago, 40FarmallM said:

Kieth and others I appreciate the reply. I work for a farm equipment dealership and we went threw a pretty rough time our boss got us buckled down and looks like we might be threw it for a little while, only time will tell. 

What I've learned is the big guys don't seem to suffer on the outside, still buying new iron and trading on some used. I assume this is just the price of doing business on such a large acreage. Some of the smaller farmers I know I've seen some extra gray hairs come up but not a lot of talk. I see the dairies up in my FIL Minnesota neighborhood closing up and calling milking cows a done deal, will be interesting to see if they keep farming. I don't know the cow to acreage ratio it would take to make a living, IE "I need 100 cows and 320 acres to make my living" (I'm sure those numbers aren't right I honestly don't know how many acres it would take to feed cows and how many cows it'd take to make a living in normal years) but I'm sure the acreage converted to all row crop grain production acres will flood the market and make it worse on the crop farmers in the area...

Think about this, and maybe I’m making too much of this, but when you start looking at balance sheets; these larger more progressive farms are operating on tight but manageable margins and most are leveraged to the razors edge.

When things are ok to good, they can make it work, but now as I stated in my previous post, beef equals dairy prices, when these guys figure a dairy cow is worth two beef cows, but reality shows otherwise- you just witnessed 50% of your equity vanish, yet your debt didn’t, in fact it’s probably higher now. 

When a bank looks at this they’re going to have to make some serious decisions about how much they’re willing to lose, do they cut their loses and force forclosure knowing they will get pennies on the dollar, or do they double down and loan these farms money knowing they can recover quicker than a small guy who might have been ok in good times, but won’t recover if this mess continues BUT, the bank WILL recover everything they’re owed!

think about that...

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2 hours ago, Ihfan4life said:

We just went through an auction two days ago.

Some observations from me;

Cows are indeed going to slaughter based upon AGE of cow,NOT production. We had our best cows leave on the beef truck. One cow consistently produced 140 plus pounds of milk since freshening in the fall- BEEF- this was a cow you wouldn’t have known existed, NO health issues, No mastitis, nothing that would warrant her being culled EXCEPT for her age. Another example- a beautiful fresh older cow, she would be one of those cows you would build a herd from. Freshened in with 160 plus pounds of milk, not a blemish on her- beef? 

What a crying shame, simply because beef is worth more than a dairy cow! I’ve been in dairy my entire life, I have never witnessed this inversion, you could always figure buying a springer for a beef and a half to two beef cows!

Because of this no one is willing to take a risk( or perhaps the banks aren’t willing to take a risk) on mature cows.

 I’m estimating 1/3 of these cows were culled. Granted, some of them needed to be culled but I don’t know about a third of them.

Wow. Yes, what a crying shame. 

Keith

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2 hours ago, Ihfan4life said:

Think about this, and maybe I’m making too much of this, but when you start looking at balance sheets; these larger more progressive farms are operating on tight but manageable margins and most are leveraged to the razors edge.

When things are ok to good, they can make it work, but now as I stated in my previous post, beef equals dairy prices, when these guys figure a dairy cow is worth two beef cows, but reality shows otherwise- you just witnessed 50% of your equity vanish, yet your debt didn’t, in fact it’s probably higher now. 

When a bank looks at this they’re going to have to make some serious decisions about how much they’re willing to lose, do they cut their loses and force forclosure knowing they will get pennies on the dollar, or do they double down and loan these farms money knowing they can recover quicker than a small guy who might have been ok in good times, but won’t recover if this mess continues BUT, the bank WILL recover everything they’re owed!

think about that...

Very good point about equity instantly halved. We sold two Jersey almost-two-year-old heifers last Tuesday. Excellent condition, just wouldn't breed and I don't want to keep trying. One of these heifers brought forty cents, the other, fifty. A few years ago when cows were worth $ I sold a marginal Ayrshire heifer at the auction house for $1500.

Keith- 

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we sold 3 older springers last dec. tie stall barn cant overcrowd. all dhi tested low scc. 3 weeks off good udders, barely brought 600 dollars but all were dry treated and needed to be sold as dairy. lately we just sell as beef cows try not to treat to many of them.

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17 hours ago, pt756 said:

also was taling to sale barn guy we have can amish around here, I asked what there price could be he heard 7 dollars hundred is that possible?

If coops are dropping members like flies, how can these Amish farmers continue to sell milk? I know very little about how they farm but can only imagine the amount of milk they’re shipping can barely pay the trucking on the milk?

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5 hours ago, Ihfan4life said:

If coops are dropping members like flies, how can these Amish farmers continue to sell milk? I know very little about how they farm but can only imagine the amount of milk they’re shipping can barely pay the trucking on the milk?

at least some of the amish have community milk houses so the truck doesn't have to stop at each little farm.

I'm glad that my cows went as a group, and were all young. it is terrible to think of years of breeding ending up as bred heifers in a beef pen.

As much as I feel bad about my cows being gone, it is worse to see the things you guys still milking are facing.

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Darigold is ok.  Cheap inputs....

Assume we'll get a wonderful Stock paper for their profitability.  Siggghhhh

On another note..

Friend with the big dairy i post pics of...  his bosses home place(5500 hol milking).  Dairy 2 (11k jerseys milking) will be June and OR...not sure.  Bank is forcing hand with this sale announcement.  He has family who are willing to partner but being stubborn.  He was caught in a hooker sting and had drugs in him.  Bank not impressed and the Character part of credit is broken.  Been telling my friend it maybe time to put in notice.

 

Wire victim....i didn't touch it.  That be illegal....

Hey ladies, been awhile behind that stack of hay.

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3 hours ago, AKwelder said:

Is that the spread you showed me in California?  

We seen the Jersey farm.  On paper they aint beyond liquidity but they just dont care for his life choices and dont wanna renew.  Understandable....IMO

1 hour ago, Ihfan4life said:

Wire victim? As in high voltage wires?

They sit on poles and spread to swoop onto mice etc and touch 2 of 3 power lines.  Crackle n pop.  About 1 a year on our block for some reason.  Swans too...

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1 hour ago, TroyDairy said:

We seen the Jersey farm.  On paper they aint beyond liquidity but they just dont care for his life choices and dont wanna renew.  Understandable....IMO

They sit on poles and spread to swoop onto mice etc and touch 2 of 3 power lines.  Crackle n pop.  About 1 a year on our block for some reason.  Swans too...

10 years ago had the same thing. I came across an eagle laying in the middle of road with its guts hanging out. Threw it in the back of my pu then called WDFW they came and picked it up. No arrest warrant was issued, Just wanted to know where I found it. 

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1 hour ago, TroyDairy said:

We seen the Jersey farm.  On paper they aint beyond liquidity but they just dont care for his life choices and dont wanna renew.  Understandable....IMO

 

What a shame, And I agree about life choices and the bank.

 

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