There are becoming fewer dairy farms across the nation as milk prices continue to plummet. Iowa State University Extension and Outreach Dairy Specialist for Northwest Iowa Fred Hall says, unfortunately, the outlook for the dairy industry doesn’t hold too many bright spots.
“Actually, this is the fifth year that the dairy market has been depressed,” Hall said. “You know we look back five years ago, we were seeing $20 milk. And now, we’re seeing prices in that $15 to $16 dollar range.”
Hall says it is not just the smaller size dairy operation that is suffering. The low prices have also forced many mid-size to larger dairy operations to quit. Hall says there is a small percentage of dairy farms that although are hurting because of the low milk prices, they are able to hang on, at least for now. He says there is a wide number of dairy producers who may be able to survive if they can adapt their operations to the current conditions.
“Where I really find the problem is that 300 to 900 cowherd who’s invested, say when milk was at $20, they have a lot of payments on stainless steel, or land, or tractors and buildings, those are the herds I’m finding are really in trouble. They just trimmed all the expenses, and they’re really struggling,” he said
Hall says trade barriers have prevented the dairy industry from marketing milk products to many of our traditional foreign customers.
“Mexico is one of our biggest importers of our dairy products. And obviously with this tariff and trade limitations that affects it. A year ago, we were seeing 16 percent of every gallon of milk exported. Now it’s around 12 percent,” said Hall.
The dairy specialist says in addition to Mexico, China and the Pacific Rim nations had been good purchasers of U-S Dairy products and still may hold the best opportunity for a reversal of the current trends.