The major crops grown in the Midwest appear to be heading for a third year of bargain basement prices, below most farmers' costs of production. And lately dairy prices have fallen into the tank with crop prices, matching 25-year lows. At the same time, weather patterns seem to be changing and large areas of the United States are under threat of drought. There's also uncertainty about government coming to the rescue after bailing farmers out of financial problems for the past two years. The current increase in farm aid comes on top of payments for participating in federal farm programs.
Cheap feed leads to more milk and lower milk prices.
We've had two pretty good years in dairying, so we knew what would happen. More cows, and milk production is up. Weather provides another way for getting grain supplies back in balance with demand, he says. The long-range weather maps I look at show widespread drought. We're on the edge of it, so we have to figure we will get a crop.