Sunday, August 12, 2012

Wisconsin Dairy Goat Industry Drooping as Drought Lingers

The severe drought affecting southern Wisconsin may have a severe impact on the number of dairy goat farms left in the state by year's end.

With a sharp increase in feed costs (due to lack of forages), and a sharp decrease in milk production (due to heat stress), dairy goat farmers are predicting a mass exodus unless the pay prices that cheese plants pay for goat's milk are significantly increased.

"I am doing what I can, and writing to the people who buy the milk to try and deliver the message that we can't keep going when the price we get is less than what we can make it for," one goat producer messaged. "We all need to keep spreading the word so we can save our farms."

A cheese processor, Montchevre in Belmont, Wis., did just that last week, temporarily bumping up the price paid for 100 pounds of goat's milk to $33.50, up $1.50. In a statement made July 31, company president Arnaud Solandt said: "We trust this pricing adjustment will provide some sensitive relief. We also hope it will either influence other goat cheese manufacturers to do the same, or incite goat milk producers to come to Montchevre."

While goat farmers who ship to Montchevre said they appreciated the temporary bump in pay price, others said a permanent increase in milk prices must happen if Wisconsin doesn't want to lose the majority of its 196 licensed dairy goat farms. 

Case in point: an analysis posted on a dairy goat email list by a goat milk producer on August 1 stated dairy goat farmers need another $10 per hundredweight to bring them back to last year's profit levels. 
 
His analysis showed the following:
  • The base price of goat milk shipped to cheese plants for 2011 was $32.19 per hundred pounds. In 2012, it has been, on average, $33.58, a 4.3 percent increase over last year.*
  • In July 2011, the milk price was $30.50 per hundred pounds. Hay, even with the Texas drought, was $150 a ton for good quality. Grain was around $330 to $340. The break even point on feed costs was 3.5 pounds of milk per goat per day. So a herd of 100 goats would have to ship 1,400 pounds of milk in four days just to cover the feed cost.
  • In July 2012, the milk price was $32. Hay is now going for $250 a ton and grain is now $400 a ton. The break even point is now 4.6 pounds of milk per goat per day. So now, a herd of 100 goats has to ship 1,840 pounds of milk in four days just to cover feed costs.**
Therefore, the dairy goat farmer said, the $1.50 temporary price bump from Montchevre is "like a 1/4 inch of rain on this drought. It helps, but it is not going to fix the problem goat producers have in staying in business."

Another goat producer, who started milking three years ago, was forced to sell his herd on June 30 and rent out his facility to a large goat farm, just to keep making the farm loan payments. He hopes to save enough money in the next four years - if feed prices go down and the drought subsides - to build back the herd. Even with his recent loss, he thanked Montchevre for increasing the pay price last week.

"Thank God Montchevre is trying to do right by their producers, but as of this moment, nobody else is," he said. "I am afraid I will be working for the next four years for nothing, as will a lot of other people."

Kenny Burma, who started goat farming in 1996, retired, and then came back with a new facility, is now running a 600-goat farm in Green County. On August 3, he told the Wisconsin State Journal that a square bale of hay that cost him $45 six months ago now costs $100. Feed pellets that cost $229 a ton a year ago now cost $436.

"Is the increase from Montchevre enough? Maybe not, especially for those farmers who are recent to the business and have loans to pay," he told veteran reporter George Hesselberg. "If you are living milk check to milk check now, you will not survive this winter."

With roughly a third of the 196 dairy goat farms in Wisconsin estimated to be in business less than three years, it is doubtful that they - much like many Americans in this economy - are doing much more than living from pay check to pay check, after paying the bills and buying food for themselves and their animals.

Burma summed it up this way: "You have to wonder if it's worth it. Why am I getting up at 4 a.m. every day and losing money? I could do that in Las Vegas and have a better time."

* The average price was figured by adding up total yearly milk prices and dividing by number of pay periods.

** The total quantity of milk a goat gives each day is considerably less than that produced by a cow. A good dairy goat provides between 6 to 12 pounds of milk a day for about a 305-day lactation. In comparison, a good dairy cow provides almost five times that amount. -- courtesy of UW Cooperative Extension.

1 comment:

George H. said...

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