The future of dairy in the nation’s largest milk-producing state is on shaky ground these days. Dairy producers in California are facing high feed prices and low milk prices. The issue has been made worse by what some charge is an unfair pricing policy in the Golden State. Some producer groups have filed suit against the California Food and Agriculture Department charging the gap between the California pay price and the Federal Milk Order Class III price has been consistently larger than it should be. John Fiscalini has a 500-acre, 1,500-cow dairy at Modesto; he puts five to ten percent of the milk through his on-farm cheese factory and markets it nationwide and some in Canada, Japan and Malaysia.

He thinks the California dairy industry has peaked, “I don’t see that we will grow as an industry. We’ve lost 200 out of 1,800 dairies in the state over the last two years so we are down to about 1,600 dairy farmers.” Fiscalini says the state order system they have does not work, “Right now we are about $2.00 below the rest of the nation.” On top of that, he says regulations have made it more difficult for dairy plants to expand so that hinders any growth potential as well. With very little expansion going on in the state, Fiscalini says when a dairy does sell-out, more of the cows are going to slaughter instead of going into another herd.

AUDIO:Fiscalini talks about the state of the California industry 8:33 mp3

The drought is certainly a big topic for discussion at World Dairy Expo this year. Bill Siebenborn milks 80 cows on a grazing operation at Trenton, Missouri, he says there are some crops around in his area but hay is in short supply and his corn silage came in about 40 percent of normal. On the positive side, milk prices are moving higher and he says he will survive. He says a lot is going to depend upon debt load and how much feed producers grow themselves. Siebenborn serves on the board of Dairy Management Incorporated and Dairy Farmers of America so he has plenty of opportunity to talk with producers from around the country. “Producers in the west are feeling a pinch they have never felt before and a lot of them are going to go out of business.” In the Midwest where producers raise a lot of their feed it doesn’t look too bad.

He says the higher dairy prices will of course mean consumers may be asked to pay a little more at the grocery store and that is where the Dairy Checkoff comes into play to convince consumers that dairy is still a good value.

AUDIO:Siebenborn talks about the dairy status 9:52 mp3