Drought Expected To Bring Higher Dairy Prices

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Friday, December 31, 2011

This year's drought is expected to raise dairy prices, as many Kansas farmers are struggling to find enough hay and grain to feed all their livestock.

Many Kansas dairy farmers like Mike Rausch are starting winter with a lack of feed for their livestock. The cost of feed is higher, especially alfalfa hay which is at a record high price of about three times the normal cost.

In order to get optimum milk production, farmers have to keep their cows well fed. Because the feed cost is so high right now, farmers are selling cows at lower prices. That selloff could lead to a milk shortage and higher prices.

"You're going to have to see higher prices. It's a simple matter of supply and demand," said Rausch.

The drought caused many Kansas farmers to only get one cutting of alfalfa this year instead of the usual four cuttings.

"In 35 years here, this is the first year I didn't raise enough silage to put in the silo to last until next spring," said Rausch. "I've never seen feed that short this early in the winter."

In some parts of the country, hay was in such short supply that many ranchers, unable to sell their horses and donkeys at auction, were forced to set the animals loose. Traders say milk was the biggest priced commodity of the year. In 2010, milk futures were $13.72 for 100 pounds. In March of this year, they hit a high of $19.65, the highest since July 2008.

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