KEYC - KETELSEN REPORT: Dairy Farm Outlook

KETELSEN REPORT: Dairy Farm Outlook

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Minnesota may not be the nation's largest dairy producer, but the state's dairy herd produces about 9.6 billion pounds of milk annually according to the USDA.
As with most agricultural sectors, dairy farmers have seen their share of ups and downs. 
Dairy farmers across the country have been facing their share of challenges in recent years. From low prices to finding hired help to do the milking, it is not an easy business.  Paul Liebenstein is a diary producer from the Dundas, Minnesota area, his operation is 400 cows, and they milk three times a day, making it 24-7. He says that dairy prices are more cyclical than ever and producers have to plan ahead.
Liebenstein said "The good times are really good and the bad times are really bad. So you've kind of gotta learn that when it's good maybe you should be paying down some debt and doing some of those things and don't get carried away. Right now it's a little above break even, and as far as ag goes, it's about as good as anything out there."
The Minnesota dairy farmer says there is simply too much milk and not enough capacity to process the product, and that has been a growing problem.
The processors will tell us we can have more processing but we have to have a market for the milk. At the same time, there hasn't been a whole lot of new processing brought on line. I think of all the little processing plants that have been closed up in the past 20 or 30 years. At least in Minnesota in the southeast area there hasn't been any new plants and we have some of the best dairymen, I would say, in the entire country here.
And with fewer plants to process the milk, there's less competition from processors and the milk has to be transported farther in many cases.
It's never been easy being a dairy farmer. From getting up early to going to bed late at night, now finding a processor to pick up your milk it yet another challenge. Prices have not been very good over the past few years. The good news is prices are better right now and for dairy farmers, that is good news.