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Volatile price environment challenging dairy farmer profitability

Dairy farmers say input costs, labor shortages and transportation bottlenecks are cutting into profitability. 

Tony Graves milks about 1200 cows in Dundas, Illinois. He tells Brownfield remaining profitable in today’s price environment is challenging.

“We were very fortunate to have good milk prices in 2022, we knew it was going to drop a good bit, we’ve got high feed prices, and everything has gone up terribly, no matter what you by. So, it is going to be challenging. We have to watch our P’s and Q’s and try to do things right to make money.”

Fellow dairyman Mark Erdman of Chenoa agrees. “The price of milk that we get has really dropped, but the price of milk in the store does not reflect what we are getting paid. It is not a correlation on the balance of trade. Once that comes down, I think demand will come back up.”

Erdman says they are also feeling the effects of labor shortages, especially in the trucking sector. “As farmers, we are the only ones who pay trucking in and we pay trucking out. Then, with the price of fuel we are getting whammies on both sides of it.”

Brownfield interviewed Graves and Erdman during the Illinois Dairy Summit in St. Rose on Wednesday.