January 10, 2018

Milk Intelligence: Producers Reflect on 2017

 |  By: Anna-Lisa Laca

It's safe to say 2017 was rough on the farm. Not only did milk prices lack luster, but it was the second year of a continual drag on farm profitability. At this time last year, producers included in the MILK Intelligence survey anticipated their average 2017 milk price to be $17.81. Unfortunately, that turned out to be wishful thinking.

2017 margins

“I can’t remember a time margins have been this tight for this long,” says Greg Jans who milks 950 cows.

Fortunately, the lowest price respondents were paid in 2017 was $1.24 higher than the lowest price received in 2016. Looking toward the future, the majority of producers do not anticipate growing their herds, 46% say they will stay the same size.

“We are trying to survive,” one farmer said. In addition, very few anticipate installing new technologies on the farm. However, one producer plans to put in a methane digester, another: new calf feeding technology, and a handful plan to invest in management software in the coming year.

Labor costs

The survey’s bright spots were labor and feed costs. Farmers anticipate some relief in feed costs. In addition, 54% of the farmers included expect labor costs to stay the same or decline in 2018. Still, 42% think labor costs will increase by 25% this year.