2014 was a great year for dairymen in terms of the milk prices.
But what about the future? Nothing is really nailed down, correct? So take a deep breath. Could it all change and go down? Yes! Seasons change, fuel prices vary, corn and soybean prices jump around. Milk prices are like a river. Always on the move.
Up, down, or even sideways! All business sectors have up’s and down’s. The automobile industry, housing industry, oil industry … everything. Even heating fuels like propane have peaks in price and valleys in demand! These industries have plans in place to “weather the price storms.” And Dairy Farms must do the same inside their business plans. For example, if Oil demand drops, does OPEC increase oil production? No, instead they generally cut crude oil production to match demand to help ultimately raise prices.
Dairy farming is a lot like auto racing. There are times to put the pedal to the metal and to surge ahead. Cow numbers and total milk production in the USA around the world are like that too. One needs to use the brakes to slow down sometimes too. Often less cows can mean more net profit. So keep culling 1-2% of your cows every month. Contract feed prices if possible. Get yout milk machines checked and overhauled every 90 days or less. Bottom line: Quality Milk below 150 SCC produces money.