Milk Prices Soar

[Mike]

Milk Prices Could Soar to $5 a Gallon by Summer's End
Thursday , June 28, 2007

By Catherine Donaldson-Evans

Come fall, when the kids head back to school, Mom and Dad are likely to find that a gallon of milk for cereal will cost them more than the gas that got them to the store to buy it.

The national average price for the calcium-rich drink that "does a body good" could hit a record $5 a gallon by September, MarketWatch reported Tuesday. The current average price is about $3.50 a gallon nationally, say dairy experts. That's more than the current national average gas price, which is $2.975 a gallon, according to AAA.

High fuel prices, drought and a spike in the cost of feed and dairy operations are all kicking up the price of the frothy, white beverage. Booming international sales and last year's lower farm milk prices, which slowed its production in the United States, are adding to the soaring costs.

"So many things play into it," said Auburn University dairy expert Boyd Brady. "The price is going to increase a little bit more than what it is right now, that's for sure."

At one Alabama Food Mart, a gallon of milk was already going for $4.39 earlier this month. And agriculture experts say that this summer we could see new record highs, with the price of milk shooting up to $4.50.

Jim Oberweis, owner of Oberweis Dairy Inc. in North Aurora, Ill., said his company is raising milk prices for the second time this year, by $.10 per half-gallon, The Wall Street Journal reported. Oberweis — which has 44 stores and delivers milk to 35,000 homes — implemented the first increase in May.

Americans have been enjoying moderate milk prices for years, so the sudden rise will be a definite hit to the wallet — especially when consumers are already struggling with higher gas and electricity costs.

"We're so accustomed to having a cheap food service, when there's an increase, we say, 'Oh my God, Chicken Little, the sky is falling,'" said Brady. "It's been underpriced. And dairy farmers have no control over what the price of milk is."

In fact, the cost of milk is dependent on the barrel cheese price, according to Brady, who said the reserve dairy supply the United States has had for several years has been depleted over time.

U.S. dairy sales in Asian countries including India and China are growing, according to agricultural economists. At the same time, the United States is compensating for a decline in dairy export from rain-deficient Australia and New Zealand, which hasn't been able to expand its milk production.

The United States Department of Agriculture (USDA) predicts that milk production for the remainder of this year will grow by about 1.2 percent, but demand will far outweigh the production increase.

Prices of other dairy products like butter and ice cream should also continue to climb as a result of surging milk and cheese prices.

Shares of the nation's largest milk distributor and processor, Dean Foods Co., plummeted by 5.5 percent earlier this month after it slashed its profit forecast in light of the rising raw milk costs.

The Associated Press contributed to this report.

 

[Econ101]

I would like to see if those higher prices are making their way to the producer and not just the processors.

 

[Kathy]

Don't worry, we can buy "powdered milk" from China. I'm sure they'll tell us they can produce it and ship to North America in this form, cheaper than greedy dairy guys can here.

Is this just sarcasim, or a future reality?

 

[PORKER]

Just got back from the store with Ma and we purchased 1/2 gal .organic whole milk for $3.49. Also got a big organic mango from Florida ,a 2lb. der and it cost $2.50. Wonder if the two farmers made any money. The Milk came from Organic Valley.

 

[Econ101]

There is a dispute in the organic community with some of these "organic" dairies. One of the major concerns is whether or not the cows have access to pasture or are fed in the bunker.

If you have ever seen any of the big dairies, you will know that the mega dairies that use the bunker type, which is the way most mega dairies operate, are filthy. The dairy producers in my area use pasture mainly to produce their milk.

Maybe now they will be compensated for those pasture costs because the bunker dairy's costs are going up. It will just be a pay raise for those small dairies who grow all their own food and pasture graze their cows. I would always rather have pasture raised milk over the big mega dairy factory farming. Anyone visiting dairies would probably agree with this---unless they were the big bunker type dairies.

 

[Mike]

Sometimes those big "bunker" type dairies bring fresh green chops (chopped millet or sudangrass in summer, ryegrass or wheat,oats in winter) to the cows each and every day.

Would that not be the same as pasture fed? If not, it should.

What about silage, is that not a pasture grass stored, then brought to the cows?

We did this when we were in the dairy business. It was cheaper to bring the food to the cows than it was the other way because of distances to crops.

You can't expect a dairy cow to walk 2-3 miles per day for food.

 

[Econ101]

Sometimes those big "bunker" type dairies bring fresh green chops (chopped millet or sudangrass in summer, ryegrass or wheat,oats in winter) to the cows each and every day.

Would that not be the same as pasture fed? If not, it should.

What about silage, is that not a pasture grass stored, then brought to the cows?

We did this when we were in the dairy business. It was cheaper to bring the food to the cows than it was the other way because of distances to crops.

You can't expect a dairy cow to walk 2-3 miles per day for food.

The dairy farmer that I know and was talking about does grow corn and uses it as silage. This carries him over and also provides him some feed to feed the cows when milked. Almost all dairies I have seen have fed cows something in the milking salon while milking--even the pastured cows. I do see his cows out in the pasture eating grass and being rotated all the time. Most big dairies never let their cows see a growing blade of grass.

My cousin worked for the largest diary in the world (maybe at that time only) in California. Those cows never get to see pasture. Most of the holding areas look more like a dirty feedlot than a nice pastured dairy.

Sure that limits the size of the dairy, but so what? I would trust those little dairies a lot more and the production is not so centralized.

 

[PORKER]

Pastured cows milk has a compound in it that gives you better health. Also pastured beef has a couple of good compounds in it to.

 

[Mike]

What I am saying is it shouldn't matter if you take the cows to the grass, or take the grass to the cows.

The end result is the same diet for the cows.

To make a living in the dairy now you must have a substancial volume of milk to sell. It may not be possible to have enough fresh pasture close enough to the dairy parlor to provide the cows with.

Good dairy cows don't walk long distances very well.

I have never been to the largest dairy in the world but I have studied the in's and out's for 30 some-odd years while in the business.

Small dairies have not been able to feed a family for several years.

 

[Econ101]

What I am saying is it shouldn't matter if you take the cows to the grass, or take the grass to the cows.

The end result is the same diet for the cows.

To make a living in the dairy now you must have a substancial volume of milk to sell. It may not be possible to have enough fresh pasture close enough to the dairy parlor to provide the cows with.

Good dairy cows don't walk long distances very well.

I have never been to the largest dairy in the world but I have studied the in's and out's for 30 some-odd years while in the business.

Small dairies have not been able to feed a family for several years.

Small organic dairies are doing this. As feed stuff (corn and other concentrates) becomes more expensive, the pastured dairies will be more profitable.

The number of diaries in our state have decreased dramatically because the low prices they received. This was a result of cheap feed. Too many family farms were put out of business and that business went to the large dairies who were using primarily corn and other non pastured feed. Higher corn prices may make the pasture dairies more economical. The benefits of grass pastured that porker speaks about have not won in the economic war with cheap feed prices, even though they may be valuable. Most consumers have not been educated as to the benefits of grass dairies. The big mega dairies have taken the market with cheap concentrated feed. As prices of fuel and corn grow, the small grass dairies will become more profitable.

 

[NMRANCHER]

Darn, May have to switch to that soy milk.


On second thought,"Calfy, you had better start living and sucking or I am going to have tomake a milkcow out of your momma and you will get the instant stuff."

 

[Bill]

What I am saying is it shouldn't matter if you take the cows to the grass, or take the grass to the cows.

The end result is the same diet for the cows.

To make a living in the dairy now you must have a substancial volume of milk to sell. It may not be possible to have enough fresh pasture close enough to the dairy parlor to provide the cows with.

Good dairy cows don't walk long distances very well.

I have never been to the largest dairy in the world but I have studied the in's and out's for 30 some-odd years while in the business.

Small dairies have not been able to feed a family for several years.

Small organic dairies are doing this. As feed stuff (corn and other concentrates) becomes more expensive, the pastured dairies will be more profitable.

The number of diaries in our state have decreased dramatically because the low prices they received. This was a result of cheap feed. Too many family farms were put out of business and that business went to the large dairies who were using primarily corn and other non pastured feed. Higher corn prices may make the pasture dairies more economical. The benefits of grass pastured that porker speaks about have not won in the economic war with cheap feed prices, even though they may be valuable. Most consumers have not been educated as to the benefits of grass dairies. The big mega dairies have taken the market with cheap concentrated feed. As prices of fuel and corn grow, the small grass dairies will become more profitable.

Todays dairy cow can't even begin to ingest enough "pasture" to milk, rebreed and maintain itself. Have you seen what a high maintainance milk producing beast the dairy industry has developed?

Where are all these "miracle:" dairy cows going to appear from to turn "pasture" into milk. Sure not from the few producers you allude to.

Oh and by the way E-Con:

Almost all dairies I have seen have fed cows something in the milking salon while milking--even the pastured cows.

It's a milking PARLOUR not a SALON!!! I shouldn't have to tell an expert such as yourself that.

:lol: :lol: :lol: :lol: :lol: :lol:

 

[Econ101]

What I am saying is it shouldn't matter if you take the cows to the grass, or take the grass to the cows.

The end result is the same diet for the cows.

To make a living in the dairy now you must have a substancial volume of milk to sell. It may not be possible to have enough fresh pasture close enough to the dairy parlor to provide the cows with.

Good dairy cows don't walk long distances very well.

I have never been to the largest dairy in the world but I have studied the in's and out's for 30 some-odd years while in the business.

Small dairies have not been able to feed a family for several years.

Small organic dairies are doing this. As feed stuff (corn and other concentrates) becomes more expensive, the pastured dairies will be more profitable.

The number of diaries in our state have decreased dramatically because the low prices they received. This was a result of cheap feed. Too many family farms were put out of business and that business went to the large dairies who were using primarily corn and other non pastured feed. Higher corn prices may make the pasture dairies more economical. The benefits of grass pastured that porker speaks about have not won in the economic war with cheap feed prices, even though they may be valuable. Most consumers have not been educated as to the benefits of grass dairies. The big mega dairies have taken the market with cheap concentrated feed. As prices of fuel and corn grow, the small grass dairies will become more profitable.

Todays dairy cow can't even begin to ingest enough "pasture" to milk, rebreed and maintain itself. Have you seen what a high maintainance milk producing beast the dairy industry has developed?

Where are all these "miracle:" dairy cows going to appear from to turn "pasture" into milk. Sure not from the few producers you allude to.

Oh and by the way E-Con:

Almost all dairies I have seen have fed cows something in the milking salon while milking--even the pastured cows.

It's a milking PARLOUR not a SALON!!! I shouldn't have to tell an expert such as yourself that.

:lol: :lol: :lol: :lol: :lol: :lol:

...and grass fed cattle are different than cattle bred for grain gains.

I see a lot of dairies who have cows that get most of their nutrition from grass. Years ago, almost all of them did. Just because cows have been bred to fit into the cheap corn economic model doesn't mean they have to be that way from here on out.

Salon or parlour. Who cares? Did you know what I meant or did you think the cows only went to get milked so they could get their hair done?

 

[Mike]

...and grass fed cattle are different than cattle bred for grain gains.

What are those differences?

 

[Econ101]

...and grass fed cattle are different than cattle bred for grain gains.

What are those differences?

The cattle that do well on grass to larger weights and more fat through grass may not be the best cattle that are fed high grains.

The grass fed producers I know like the smaller cattle. They may not get as big, but you can make up for that with higher numbers so it doesn't affect their bottom line. Of course there are exceptions to this. The question is, do you produce cattle that do well on grass or grain. I don't know the real answer, just what my grass fed friends say. I am sure if we had grades based on objective tenderness and palatability might change some people's views.

Bigger cattle are not necessarily the problem--it is choosing grass fed cattle that will do well on grass and in the case of grain fed out cattle, do so on less grain and less time. Most producers sell grass cattle and then turn it over to the grain feeders. That paradigm might change with higher grain prices even though it was successful in the past.

 

[Mike]

...and grass fed cattle are different than cattle bred for grain gains.

What are those differences?

The cattle that do well on grass to larger weights and more fat through grass may not be the best cattle that are fed high grains.

The grass fed producers I know like the smaller cattle. They may not get as big, but you can make up for that with higher numbers so it doesn't affect their bottom line. Of course there are exceptions to this. The question is, do you produce cattle that do well on grass or grain. I don't know the real answer, just what my grass fed friends say. I am sure if we had grades based on objective tenderness and palatability might change some people's views.

Bigger cattle are not necessarily the problem--it is choosing grass fed cattle that will do well on grass and in the case of grain fed out cattle, do so on less grain and less time. Most producers sell grass cattle and then turn it over to the grain feeders. That paradigm might change with higher grain prices even though it was successful in the past.

I'm sorry. I thought we were discussing "Dairy" animals?

The animals that are good "grain to milk" converters also have a high propensity to be good "grass to milk" converters. And Vice-Versa.

Except that efficiency will be lost when dairy cows are forced to use high amounts of energy by walking and grazing all day between milkings.

The small dairies will probably not make a serious comeback in mine or your lifetime due the inefficiencies of making the cow harvest her own food in the relatively short amount of time she has between milkings.

I wish it were not true. I enjoyed the dairy.

 

[PORKER]

Actually Mike ,This has been already discovered and talked about at the World Dairy Expo. There are lines of Holstien that are more efficient on grass and other lines with in the breed that can handle corn and hot TMR corn silage rations coversions to milk better. The Holstien and other breeds like Brown Swiss now are looking within those breed bloodlines for pasture perfect breeding stock.