Corn feed, dairy prices are increasing

TRI-COUNTY AREA—Dairy farmers are paying more for feed compared to a year ago, but are also getting paid more for the milk.
“The real concern is the price of feed,” said Cornell Cooperative Extension agriculture program leader Joan Petzen. “If you’re a crop farmer the increased price is good.”
However, for dairy farmers that means paying more to feed the cows. Petzen said the price of corn drives the cost of other grains and corn currently costs more. She explained corn cost $5.82 per bushel in January of 2011. It cost $3.87 last year at the same time, meaning a 50 percent increase over 2010.
Another feed, soy, is also up. Petzen said in January of 2011 it cost $12.60 per bushel and $9.79 per bushel last year.
Meanwhile, milk prices paid to dairy farmers are up 4.7 percent over last year and the industry expects it to rise more this year.
Petzen said dairy farms were paid $16.03 per 100 lbs. of milk in January of 2011. She said the price last January was $15.31 for a hundredweight. A hundred pounds of milk equals 11.63 gallons. She explained this is the price for the Rochester area, which covers Steuben County north and over to Watertown.
Petzen added the price farmers are paid is projected to increase this year. Upstate Niagara, a dairy cooperative, forecasts the average western New York blend price could go as high as $19.57 per hundredweight. The last updated forecast was from Feb. 21, 2011.
“The last couple of years there has been ups and downs in prices,” said Petzen. “It makes for uncertainty.”
According to Upstate Niagara, the price per hundredweight has fluctuated as low as $10.92 in July 2009 and as high as $17.53 in October of 2010.
Petzen said with prices fluctuating, dairy farmers should create a cash reserve from the higher dairy prices and use that money when they get paid less. She also said dairy farmers could benefit from Managing the Margin workshops geared towards those farmers. She explained it teaches farmers how to lock down certain costs and prices so there is less uncertainty each month.
According to the New York State Department of Agriculture, the objective of the workshop is to provide producers with concepts and tools to determine break-even prices, marketing plans, and crop insurance decisions appropriate for their operations under various conditions. Specific topics that will be discussed include margin risk, risk tolerance, break-even analysis, use of crop insurance, and market volatility.
Two such workshops in the area will be:
March 23 in Geneva at the NYS Agricultural Experiment Station, Jordan Hall, 630 West North St., Geneva. RSVP to Cathy Wallace at 585-343-3040 Ext. 138.
March 24 at the Civil Defense Center, 7220 State Route 54, Bath. RSVP to Jim Grace at 607-664-2316.