One thing is certain, dairy farmers throughout the nation hope folks drink a lot of eggnog and eat a lot of cheese balls this holiday season, otherwise they may have very little to celebrate in the new year. John Anderson, American Farm Bureau Federation livestock economist, said skyrocketing feed costs is the big problem.
“Dairy producers certainly are looking at a pretty rough ending to 2010. We’ve kind of got our dairy industry in a classic squeeze for the last month or two of the year with escalating production costs and declining product prices,” Anderson said.
“Feed is by far the biggest single cost for a dairy operation and so when feed costs go up it directly affects profitability. The difference I think for the dairy industry as compared say to the cattle industry is cattle prices have actually held up pretty well over the last few months and we’ve seen some increases in some cases to mitigate the effect of those higher costs. In the dairy industry we’ve got these higher costs coming at a time when milk prices are actually slipping lower.”
Anderson said one thing that would help would be for Congress to pass pending free trade agreements, which would pave the way for more dairy exports.