January 8, 2013

Pennsylvania's milk farmers experience high costs for feed corn

This year Pennsylvania milk producers are under extra stress due to soaring cost of the feed corn given to dairy cows which was US$2.50/bushel just five years ago, now it is hovering around US$7/bushel.

Milk production alone is a US$2.34 billion business, with Pennsylvania dairy farmers' production at 1.2 billion gallons annually.

The hike in price has been driven up by two factors: the nation's use of corn to produce ethanol as a fuel additive and the Midwestern drought that struck hard this summer and damaged crops.

Farming is not for the arithmetically challenged. There are costs of equipment to be factored into the reoccurring costs of fertiliser, seed and pesticides; veterinary care for the animals; and then, for those who do not grow enough to feed their animals, feed. For every 80 pounds of milk a dairy cow produces, it eats 120 pounds of feed.

At the Penn State barns in State College, Centre County, the university has 220 lactating cows. There are a total of 500 animals there, including the heifers and the animals that are not currently lactating. The farm can go through 3,000-4,000 tonnes of corn silage in a year. Corn silage describes the whole plant, stalks and all, chopped up into feed. It costs US$70-80 a tonne. That does not include the cost of grain mix and hay, which the cows also eat.

"Dairy farmers, right now in the whole country, are having a struggle," Jim Marburger, president of Marburger Farm Dairy in Evans City, Butler County, said. Marburger does not grow all of the feed that his dairy needs.

He said he has trimmed costs by cutting down on some of the services he gets at the barn. Feed analysts who used to come every couple of weeks now come by once a month to see how the cows are eating. The dairy also used to have visits from the veterinarian every other week to check the herd, but now the vet comes by one a month, unless there is a pressing need.

Marburger said that while feed costs are up, consumers are drinking about 5% less milk than they used to. Prices for consumers could have spiked even higher if Congress had gone over the so-called "Dairy Cliff" but a bill on farm subsidies was passed last week.