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High milk prices unable to spur growth when met with inflation

A dairy economist says rising costs are expected to limit herd expansions despite $25 milk.

Tanner Ehmke with CoBank tells Brownfield farmers are likely to rely on more productive cows to increase profitability rather than grow their herd in the current environment.

“Really trying to squeeze as much value out of each pound of feed and each pound of milk as you possibly can,” he says.  “I think going forward that’s going to be the story because there’s really no end in sight currently on this inflation story.”

Ehmke says the drought, continued La Nina weather patterns, and reductions in feed grain production along with hay acres are also leading to tight feed supplies.

“Lock in your feed budget as soon as possible, lock in your costs before your costs continue to accelerate,” he recommends.

Unfortunately, he says there are no signs of the tight feed situation improving this year and possibly into next for many producers.

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