‘Paying for the privilege to milk’

June 26, 2011

Agriculture

Reeling dairy industry faces more challenges

South Mississippi’s dairy farmers are seeing the best milk prices in the history of the industry, but even that might not be enough to stop the steady, massive decline in dairy operations seen in the state.

“It is as bad as I’ve ever seen it,” said Alan “Pud” Stringer, who has been a dairyman in Marion County since 1972. “We just can’t make a profit.” Stringer added sarcastically that dairy farmers are tired of “paying for the privilege to milk.”

The industry, which is concentrated in South Mississippi, flourished through the early 1970s. One county alone — Walthall, which was once known as the “Cream Pitcher of Mississippi — boasted approximately 500 farms.

The entire Mississippi industry is now down to a mere 125 operating Grade A dairy farms managing roughly 17,000 head. In the last two years alone, approximately 25 farms have folded.

Back in 2001, Lamar Adams made a prediction — if things did not change, the future of Mississippi’s dairy industry was iffy at best.

“If we lose a high percentage of our dairy farms, it will be a devastating blow for this area,” said Adams, who was then a Mississippi State University Extension Service agent in Walthall County.

Today, Adams is an Extension dairy specialist. And while improved market prices and increased milk exports have somewhat buoyed his outlook, 10 years later he says the future of Mississippi’s dairy industry remains troubled.

“Farmers are faced with tremendous financial challenges in maintaining a profitable production on their farms,” Adams said.

Last May, milk was bringing $19 per hundredweight, almost double the $11.60 farmers were seeing in May 2009. The solid prices have come primarily from increased U.S. dairy exports.

However, the recession and rocketing input costs have largely offset the improved market prices.

“The export market has helped prevent domestic milk prices from plummeting further,” Adams said. But he added, “High-end restaurants serve a lot of heavy cream, cheese and butter, which has traditionally given the industry a boost. But with the economic challenges faced recently, fewer people are frequenting restaurants, resulting in a decrease in demand for these and other dairy products.”

For Stringer, the biggest hurdle is spiraling input costs. In 1972 when he began farming, he was paying $69 per ton for his feed. Today, he is paying $295 per ton for feed he says is one of the most inexpensive on the market.

Stringer has weathered many storms before, literally and figuratively. Other than timber, no other commodity suffered more than dairy from Hurricane Katrina in 2005. The storm left barns and equipment damaged and fences down. Each dairy farm suffered on average $140,000 in damages. Stringer said he lost half of his herd.

“I never did find out what happened to them,” he said. When asked how many of his fellow farmers went under post-Katrina, Stringer said flatly, “I don’t know. A lot of them had already gotten out of the business before Katrina.”

Now, weather is again adding to the dairy farmers’ woes. Drought conditions in South Mississippi could have an impact on farmers’ feed supply that might be felt into next year and beyond.

“There has been little rain in April and May, and the high temperatures are robbing the soil of moisture,” said Richard Hay, MSU Extension director in Amite County. “This is contributing to lower feed production, particularly corn.

“The biggest milk production months are in the fall, right after calving. Dipping into the fall’s feed supply may cause problems at a time when feed is most needed.”

To help offset feed costs, some Mississippi farmers are turning to a grass-based feeding method used in New Zealand. Stringer has been experimenting with the New Zealand model since Katrina, and hopes to have the system fully implemented on his farm in the next three to five years.

“We can grow grass practically 365 days a year here in Mississippi,” said Stringer, who hopes to cut his demand for feed in half with the new system.

When asked his outlook for the industry, all Stringer would allow was, “I have hopes.”

Adams reports hearing guarded optimism among other Mississippi dairy producers, too.

“It has been up and down for the state’s dairy farmers,” Adams said, “but the industry remains flexible and ready to make informed management decisions as producers prepare to face additional challenges.”

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