Drought dries dairy profits

I’ve been trying my hand at cooking lately and found that many recipes I make require milk. It wasn’t until a recent visit to a dairy farm that I discovered milk has its own ingredient list. Items like Hay, corn, soybean meal and silage are the ingredients that help to make delicious and nutritious milk. What happens when those ingredients dry up?

Those ingredients, or feed supplies, are becoming harder and harder to find as the drought conditions expand across the country. Ingredients like corn, alfalfa, cottonseed and hay have been impacted by the dry weather so availability is becoming less and less.

Kelley Cunningham stands by his dairy herd near Atlantic, Iowa. Drought conditions have impacted all areas of agriculture across the Midwest.

Kelley Cunningham stands by his dairy herd near Atlantic, Iowa. Drought conditions have impacted all areas of agriculture across the Midwest.

“My dairy cattle don’t know there is a drought going on,” Kelly Cunningham, a Managing Partner of Milk Unlimited Dairy Farms in Atlantic, said. “We still need to find food for them and to do that we’re bringing in hay from as far away as the four corners region of Utah, Arizona, Colorado and New Mexico.”

It would seem, for dairy farmers across the country, that possession truly is nine-tenths of the law these days. As the drought ruins more and more of the crops, possessing the hay used for feed becomes exceedingly significant in protecting it from other buyers wanting to purchase it for a higher price.

Cunningham manages a dairy farm that has 3400 cows. The cows produce milk in comfort on sand beds and in tunnel ventilated buildings. Those practices help keep the cows comfortable year round. There are 33 employees at the dairy but Cunningham is quick to point out that, for every employee, there are 15 other jobs tied to the farm in the area.

“We like to say that we’re a 15 family farm,” Cunningham said with a smile. “We provide milk to Anderson Erickson in Des Moines four times a day.”

Currently businesses like Anderson Erickson pay around $18 per hundred weight of milk. That number has shrunk from last years price of $23 per hundred weight. Combine that decrease with an increase in feed costs due to the drought and that is a recipe for troubled times.

“My milk has gone down $5 per hundred weight while my feed has gone up 25 percent,” he said. “So it is a double whammy right now.”

Cunningham went on to say that the future price for milk is expected to go up over the next three months so that should give them some relief. The duration of the drought has Cunningham worried about feed supplies for next year and beyond. At those prices, Cunningham will need milk prices to be at $20 or $21 per hundred weight to break even.

“Right now you’re pulling out of your savings account to keep your business running,” Cunningham said. “You can do that as long as you have something in your savings account. So we might have to look at scaling back the cows we milk and try to find cheaper feed. We have to make up that money from somewhere.”

Alternative feeds have been one way of closing the feed cost gap for his dairy. Ingredients like Molasses, beet pulp, and cottonseed have helped to supplement the diets of the cows while using less of the expensive commodities like corn and hard to find ingredients like hay.

“We are doing things every day to prepare for the future and prepare for the volatility,” Cunningham said. “We have cheaper feed in this area because this is where everything is grown. That gives us an advantage over other areas of the country that have to pay transportation costs to get their feed. Here in the Midwest we have as good of a chance as anyone to make it.”

Cunningham went on to say that the costs that they are paying for feed ingredients will raise the cost of ingredients in the food that we eat. So next year the gallon of milk pulled from the cooler at the grocery store could cost you 20 percent more.

Originally published for the Iowa Soybean Association.

Grey clouds bring no relief from drought

As a thick layer of grey clouds diminished the hot summer sun Don Swanson, an Iowa Soybean Association member, walked through one of his soybean fields near Ottumwa. The clouds could not be more misleading. It would appear, if you did not know we were facing a record drought, that it could rain at any moment. But like many other days this summer, rain never fell and his soybean and corn fields would not receive the relief they so desperately needed.

Don Swanson peers to the horizon as grey skies fill the area. Drought conditions have taken hold across much of Iowa. 

Don Swanson peers to the horizon as grey skies fill the area. Drought conditions have taken hold across much of Iowa. 

“We got off to a great start this spring,” Swanson said. “We started planting corn in early April, and we got the soybeans in without any problems. At this point, the soybeans are showing good color, but there are a lot of abortion in pods, and I think they’ve gone backwards in height as they’ve tried to conserve all the moisture they can.”

Swanson reached down and pulled one of his soybean plants from the field and instinctively examined it while shaking his head. While looking at the plants health, he voiced his concern that the drought conditions will soon be bringing other problems.

“I’m very nervous about spider mites and aphids coming in,” Swanson said while looking at the leaves of the soybean plant. ”We’re still optimistic and as weather conditions warrant we’ll still fight the bugs.”

But the outlook for rain to come to the rescue is looking as dark like as the skies above. The National Oceanic and Atmospheric Administration (NOAA) is predicting the drought to persist or intensify through October, 31.

“There’s nothing in the forecast,” Swanson said about the chance for rain. “The question now will be analyzing our crop insurance guarantees to look at economic thresholds. We’ll have to see if there’s a chance to continue to invest in this crop to provide an economic return above the federal threshold.”

Swanson like many other farmers will continue to watch the situation and work his hardest to grow a successful crop. “Farmers aren’t good at giving up,” Swanson said.

Originally published for the Iowa Soybean Association.

Farmers are not optimistic about crop sitiuation

By Joseph L. Murphy

Roger Van Ersvelde, an Iowa Soybean Association member from Brooklyn, has to go back to 1988 to remember dry crop conditions like this. For Van Ersvelde and other Iowa farmers, a lack of rain since early May combined with high winds has left crops suffering.

Roger Van Ersvelde checks the conditions of his soybean field. (Photo: Joseph L. Murphy)

Roger Van Ersvelde checks the conditions of his soybean field. (Photo: Joseph L. Murphy)

“I’m not real optimistic,” Van Ersvelde said. “If we do not get adequate rain in the next two weeks we’re going to see our yields start suffering.”

For Van Ersvelde subsoil moisture started out high, but has quickly fallen to the point where his crops are beginning to show signs of stress. He added that he has only received an inch and a quarter of rain in the seven weeks since he finished planting. That is less than half of the amount that he normally receives.

“Our fields are real ragged,” Van Ersvelde said. “You’ve got some that have emerged and some areas of the fields that are just poking through.”

He went on to say that until they received a small amount of rain on Sunday night they still had beans laying in dry dirt. A report released by the United States Department of Agriculture said that warm, dry conditions are beginning to stress Iowa row crops. The report goes on to say that the crops continue to be rated mostly good to excellent, but crop conditions declined slightly for the third straight week.”

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“The lack of significant rainfall for much of the state remains a concern,” Iowa Secretary of Agriculture Bil Northey said. “In general the crop remains in fairly good condition but will need more moisture as it continues to develop.”

Van Ersvelde is hopeful that with current row crop methods they will have better yield results than in 1988.

“I will say that 1988 versus today the genetics are much better, and the way we managed our soils for moisture, using no-till and reduce tillage, is significantly better than 1988,” Van Ersvelde said. “So even if we stay dry I think we will be surprised on how the crops do.”

Originally published for the Iowa Soybean Association. Find more great stories at: www.iasoybeans.com/news

 

Grey clouds bring no relief from drought

By Joseph L. Murphy

As a thick layer of grey clouds diminished the hot summer sun Don Swanson, an Iowa Soybean Association member, walked through one of his soybean fields near Ottumwa. The clouds could not be more misleading. It would appear, if you did not know we were facing a record drought, that it could rain at any moment. But like many other days this summer, rain never fell and his soybean and corn fields would not receive the relief they so desperately needed.

Don Swanson looks over a soybean field near his home in Ottumwa that has been stunted by the dry conditions. (Photo: Joseph L. Murphy)

Don Swanson looks over a soybean field near his home in Ottumwa that has been stunted by the dry conditions. (Photo: Joseph L. Murphy)

“We got off to a great start this spring,” Swanson said. “We started planting corn in early April, and we got the soybeans in without any problems. At this point, the soybeans are showing good color, but there are a lot of abortion in pods, and I think they’ve gone backwards in height as they’ve tried to conserve all the moisture they can.”

Swanson reached down and pulled one of his soybean plants from the field and instinctively examined it while shaking his head. While looking at the plants health, he voiced his concern that the drought conditions will soon be bringing other problems.

“I’m very nervous about spider mites and aphids coming in,” Swanson said while looking at the leaves of the soybean plant. ”We’re still optimistic and as weather conditions warrant we’ll still fight the bugs.”

A farmer holds a normal ear of corn next to one that has been impacted by drought. (Photo: Joseph L. Murphy)

A farmer holds a normal ear of corn next to one that has been impacted by drought. (Photo: Joseph L. Murphy)

But the outlook for rain to come to the rescue is looking as dark like as the skies above. The National Oceanic and Atmospheric Administration (NOAA) is predicting the drought to persist or intensify through October, 31.

“There’s nothing in the forecast,” Swanson said about the chance for rain. “The question now will be analyzing our crop insurance guarantees to look at economic thresholds. We’ll have to see if there’s a chance to continue to invest in this crop to provide an economic return above the federal threshold.”

Swanson like many other farmers will continue to watch the situation and work his hardest to grow a successful crop. “Farmers aren’t good at giving up,” Swanson said.

Originally published for the Iowa Soybean Association. Find more great stories at: www.iasoybeans.com/news