By MICHELE F. MIHALJEVICH
Indiana Correspondent

FORT WAYNE, Ind. — Dairy producers are reevaluating the cost of doing business in the wake of skyrocketing prices, according to those who provide feed and other supplies to the industry.

“Normally, many producers have their services and products contracted for the year, but this year, many are still on the fence wondering what to do,” said Michelle Robinson, feed ingredients merchandiser in the ingredients division of Zeeland Farm Services, Inc. “There are a lot of unknowns in the milk market.”

Zeeland Farm Services, of Zeeland, Mich., markets feed ingredients to the livestock industry. Robinson and her company were one of many exhibitors at last week’s Tri-State Dairy Nutrition Conference in Fort Wayne.

The 17th annual conference was expected to draw 450-500 people. It was sponsored by The Ohio State University extension, Purdue University and Michigan State University.

“Producers are paying more attention to markets,” Robinson said. “The phone rings (in their office) a lot more when the market is volatile.”

Farmers who are looking for alternatives are the kind of people Zeeland can help, said James Coomer, a nutritionist with the company.

“They want to know if there’s something out there that offers a cost advantage to them,” he said. “This is especially true with milk prices down a little bit.”

The cost of cottonseed, which is an energy, protein and fiber source, is just one example of rising costs producers must deal with, Robinson said.

“The price has more than doubled in a year,” she said. “The drought in the South has been a big factor.”

Producers should realize that trying to save money by cutting back on what they might consider nonessential ingredients could hurt them in the long run, said Tim Clark, an account manager with Ridley Block Operations of Menomonie, Wis.

“We don’t want them to reduce costs by two cents but end up reducing profits by 10 cents,” he said. “We’re working with them to realize the value they’re getting.”

Ridley Block provides animal nutrition products and services, including Buffer-lyx, a low-moisture molasses buffer block.
“Producers seem to have some guarded optimism,” he said. “The increase in feed costs has been the most troubling issue recently. We give them ideas on efficiency and work to continually improve that. They’re evaluating all their input costs.”

While some dairy farmers may trim products or services if costs continue to climb, others will keep paying the higher prices, said J.W. Jones, national sales manager for Western Yeast Company, of Chillicothe, Ill. The company manufactures yeast culture.

“A lot of dairy farmers, they have or will cut back,” he said. “But the price of everything is going up, and if they want it bad enough, they’ll buy it.”

Economics are also affecting housing design and other management practices, said Ed Pajor, an associate professor in animal sciences at Purdue.

“Producers should realize that any decisions made in favor of animal welfare, especially cow comfort, tend to be win-win and also favor economic considerations,” he said.

Factors such as more straw for bedding, stall width and location of head rails can play a role in a cow being more comfortable, he said.
Industry personnel should also be aware of a changing social ethic regarding the public’s perception of how animals are treated, Pajor said. According to a 2007 American Farm Bureau survey, 95 percent of respondents said they agreed with the statement that it was important to them that animals on the farm were treated well.