High feed prices pinch dairy farm profits

Saturday, Dec. 8 | By .(JavaScript must be enabled to view this email address)

Despite high productivity, dairy farm profits in Fauquier County are drying up, thanks, in large part, to higher operating costs.

“Farmers have limited control of the prices they charge because they’re selling on a fixed market,” said Tim Mize, agriculture natural resource agent for Virginia Cooperative Extension.

“They [dairy farmers] can’t increase prices to cover operating costs like normal businesses, and that’s a huge problem,” he said.

Mize said regional dairy farms have disappeared because of lower profit margins and arduous work.

“Twenty years ago , Prince William County had a huge number of dairy farms, and now it has two,” said Mize.

According to Mize, Fauquier currently ranks fifth in the state with 24 dairies.

Most county dairy farmers produce what is known as Class I milk, which is bottled and sold over the counter.

Current milk prices for the farmer are $21.39 per hundredweight (about 12 gallons). That translates to $1.78 per gallon.

While that’s 77 cents higher than farmers got paid in December 2000, milk price increases ha ve not matched feed price increases, which began outpacing milk prices in 2007.

“Input prices are up, fertilizer prices are up, feed prices are up and milk prices have rebounded lower, which is eating at dairy farmers bottom line,” said Fauquier County’s Agriculture Development Officer Ray Pickering.

Congress saw the need to help stabilize dairy farmers profit margins and funded a USDA program called Milk Income Loss Compensation (MILC) in 2008. Rprovided by the program offers some financial relief to dairy farmers who qualify.

According to Bill Williamson, the executive director of USDA’s Farm Service Agency office in Warrenton, 17 Fauquier dairy farmers , along with three in Prince William County and one in Loudoun County, received $398,735 in federal funding to help ease the blow from lower revenues.

However, MILC expired on Oct. 1, and won’t be reinstated until the 2012 Farm Bill is passed.

Regardless, Fauquier dairy farmer Josh Colvin, owner of CR Farms, LLC, doesn’t count on MILC revenue to help save his farm.

In fact, Colvin thinks the best thing that could happen to farmers is for there to be no new farm bill.

“We need to learn how to farm without the government, ” said Colvin.

“Farmers need to ha ve the attitude to farm not to get the subsidies, and when we do , to treat it as a bonus and not a necessity,” he said.

Colvin has been in the dairy business in one form or another all of his life.

Six years ago, he started his own dairy on land he leased in Calverton.

He currently milks 53 cows and the drop in nationwide milk commodity prices has had a significant impact on his family’ s financial future.

“I’ve operated for more than 18 months in the red,and I’m running out of equity,” said Colvin.

Colvin has had to sell most of his calves to keep his farm operating.

“All of the farmers in the county know dairy farms have it rough now, and they help us out where they can,” said Colvin.

“Some of the feed guys help me out on prices and pa yment structures, and their measurements on weight tend to be very generous, and I appreciate things like that.

“Dairy farmers, if they want to survive, need to think outside of the box marketing-wise to be successful, and I’ve got some ideas I am working on whic h I think will help turn my farm around,” said Colvin.

Some of the ways Colvin and other dairy farmers are combating high feed costs is to increase grazing.

According to Colvin, grazing cows instead of using feed saves him between 50-60 percent in feed costs.

Grazing cows, however, are even more dependent upon good weather and need sizable, fertile pastures. Still, declining profits and a bleak outlook for future milk prices have taken their toll.

“When you wake up every day, and you know you’re going to lose money when you go to work, it takes the zip out of your step,” said Colvin.

“People ask how can we do it, and all I can say is that we hope and we pray for better days.”

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