California dairy producers losing over $8 per cwt

Rising costs and falling prices continue to wreak havoc on dairy producers across the country. The situation may be the worst on the west coast based on numbers just released by the California Department of Food and Agriculture.

During the first six months of this year, the average price paid to California dairy producers was $10.47, while it cost $18.51 to produce milk during the first three months of the year. That spread yields an $8.04 loss for every 100 pounds of milk leaving the farm. High feed costs have been depressing margins for some time. Even with last year's substantially higher milk prices, the profit margin was only 16 cents due to high feed prices which pushed production costs to $17.31.

While all costs have been rising, it has been feed costs that have risen the most, moving from $6.48 during the first quarter of 2005 to $9.82 this spring. As CDFA points out, comparing the first quarter of 2005 with 2009, grains, minerals, and supplements costs per ton increased 56 percent. Meanwhile, dairy-quality alfalfa hay rose 63 percent per ton.