meta Sell or keep the herd? Low milk prices tax dairy farmers :: The Bullvine - The Dairy Information You Want To Know When You Need It

Sell or keep the herd? Low milk prices tax dairy farmers

Dale Austing sold the cows off his dairy farm in Freeport a couple months ago and is still coming to terms with the major life change. 

Austing kept 120 cows for 30 years, and his wife worked off the farm, he told about 50 farmers and agribusiness representatives Wednesday at an event in Albany called Farming in Tough Times. 

“We did a lot of thinking, crunched a lot of numbers,” Austing said. “Is it right or wrong? I don’t know. Everybody’s different.”

It is a tough time for Minnesota dairy farmers. Farmers leave the industry every year, due to industry challenges and because they’re reaching retirement age, said Emily Wilmes, an educator for University of Minnesota Extension, which put on Wednesday’s event.

The price of milk destined for a glass fell 8.5 percent this month over last, to less than $16 per 100 pounds, according to the U.S. Department of Agriculture. And the price of milk is not expected to rise much in coming years. That price fell, in part, because other parts of the world have increased milk production. 

“Europe is really making milk right now,” said Jim Salfer, regional diary extension educator. He and other educators shared data on milk trends, brought in an expert in mental health and asked farmers to share their stories and lessons Wednesday. 

Austing, who’s 55, decided to shut down farm operations because of his age and the economy. 

“It doesn’t pay to invest more. Will you get that investment back in 5 or 10 years,” he said. “I can’t talk about life after cows, it’s only been two months. … We’ll see what the future brings.”

Getting rid of a herd and changing lifestyles is difficult decision, just as staying in the business is difficult, said Ted Matthews, a rural mental health specialist. 

“If you don’t like stress, don’t farm,” Matthews said, mentioning the early and long hours and the lack of vacation time. “Dairy farmers have to be born diary farmers.”

Family time and communication are important, he said. “You need time to recuperate. You need time to have fun.”

Wednesday’s event emphasized moral support alongside insights into farm management.

In the 1960s, hard work was a key to profit in the dairy industry, Salfer said. In the 2000s the focus was on the comfort of the cows. And in the future, efficiency will be a cornerstone of success, Salfer said. Farmers need to milk more cows with the same amount of labor they’re employing now. 

Dan Roerick has about 100 cows near Upsala. He’s looking into a robotic barn to increase efficiency at his farm, but the low projected milk prices and a rise in dairy farms could be a roadblock. 


“It’s kind of a scary future right now,” Roerick said. 

Isaak Hinnenkamp already has robotic milkers on his farm north of Melrose. In addition to a herd of 140, he keeps hogs. Hinnenkamp, his wife and his mother run the farm and have found ways to cut costs. They spray their own crops and they do their own breeding, he said. 

“Diversification is an OK option,” Salfer said. 

The news is not all grim. Milk prices are expected to trend up slightly from 2017 to 2025, Salfer said. 

In 2016 data, dairy farms had a 4 percent operating profit margin and a 1 percent return on investment, said Extension Ag Economist Joleen Hadrich. Dairy farmers as a group are solvent and making positive returns, she said of her analysis.

Hadrich encouraged farmers to calculate what new investments will end up costing them per cow or per acre.

“You make more money, you can expand — not a shocking revelation,” she said. She hopes to learn more from the farmers who are succeeding despite the market challenges. 

“We know it’s difficult to farm right now,” Hadrich said. 

Send this to a friend