Kings County dairies might be celebrating a white Christmas long into 2014.
A booming export market and lower feed prices are conspiring to make the new year look good for local milk producers, who annually generate sales worth hundreds of millions of dollars.
It’s a welcome improvement after the market tanked over the last two years. A combination of high-feed prices and low milk prices drove an estimated 22 local dairies out of business in 2012, lowering production value by more than $100 million.
Estimates for 2013 aren’t available yet, but anecdotal evidence suggests that Kings County’s leading agricultural industry has slowed if not completely stopped the bloodletting.
“It’s picking up, definitely picking up,” said Jake DeRaadt, a Lemoore dairy operator. “We’re getting some good milk checks, and we’re getting some good money for our culled cows.”
“I don’t have a crystal ball, but from what I see down the road, I think this might be sustainable for a while,” said Hanford dairy operator Joe Machado.
By the end of the year, U.S. dairy exports will have risen some 30 percent in value over year-earlier levels, to $6.7 billion, according to the U.S. Dairy Export Council. A Rabobank report released earlier this month predicted that international prices will remain high for “at least the first half of 2014” due to China buying up enormous quantities of nonfat dry milk.
Some industry leaders look at that and see the key to the industry’s future.
According to Machado, however, it’s a two-edged sword.
“It’s a blessing and a curse at the same time,” Machado said, noting stagnant domestic demand for milk products. “If that export market goes away, we’re pretty much screwed.”
He wasn’t the only one expressing skepticism.
“We’re holding our own,” said local milk producer Theo de Haan. “It’s hard to say where we’re going.”
Drought issues are also weighing heavily on the minds of producers. They depend on a bountiful hay crop to keep feed costs in check.
“Everybody’s got their straws in the earth pulling water out faster than it’s being replenished,” de Haan said. “There’s a big struggle for water.”
“If we don’t get rain, it could get pretty ugly on the feed side,” said DeRaadt.
Source: The Sentinel
