Dairy farmers in the United States are facing the prospect of a three-year slump in milk prices and profits, according to a dairy breeding specialist.
“We have too many replacement heifers in the system at the present time,” said Mike Behnke, business manager with Wisconsin-based St Jacob’s Animal Breeding Corporation.
“The numbers just don’t stack up at the present time. We have nine million dairy cows and 10 million breeding heifers coming through.
“Over the past 12 months milk output in the US has been running 3.0% above what the market requires. This self-sufficiency figure takes account of both home demand and all export opportunities.
“Combined fat and protein production increased by 2.0% over the past year.”
Mr Behnke spoke at a recent meeting of Holstein NI.
He said that dairy farmers are currently receiving the equivalent of between 23.8ppl and 28.0ppl for their milk.
“The average cost of production on US dairy farms is the equivalent of 30ppl. So all milk producers are losing money at the present time. And there is no upturn in market returns on the horizon.
“American consumers want cheap food and the US government is happy to reflect this in the farm policy it is following.”
Mr Behnke admitted that the US cattle breeding industry had fallen foul of its own success.
“Sexed semen works,” he stressed. “This is part of the reason why we have so many replacement heifers coming through at the present time.
“But the investment made to bring through cows with better health traits has also worked. Cow fertility has improved, as has longevity. As a result, cows are staying around for longer periods of time. The end result is more milk and more breeding replacements.”
Mr Behnke also confirmed that US farmers are now using more beef semen on their cows.
“The end result of all this is a headache for the beef industry as it struggles to cope with additional cattle numbers.
“The only way of bringing milk output more in line with demand is to cull the excess heifers now on the ground.”
The breeding specialist ruled out any hope of increased exports coming to the rescue of the US milk sector.
“The dollar is too strong at the present time,” he said.
“Nor do I think that China is going to bale out the US milk industry. We have been hearing for years that China’s increasing middle classes are going to buy up all the dairy protein, which the world can offer them.
“All of these opportunities have failed to materialise up to now. And I don’t think this situation is going to change into the future.”
Commenting on the dairy breeding programmes now ongoing in the US, Behnke said that farmers should look to use a mix of genomic and daughter proven bulls.
“Genomics is not always the answer,” he stressed.
“Daughter proven sires will always provide milk producers with the opportunity of breeding an even group of cows.
“Yes, genomics has its place. But, in my own case, I would always be drawn to a daughter proven bull. I then have the opportunity of seeing his progeny on the ground.”
The St Jacob’s representative admitted that in-breeding remains a challenge for the Holstein breed around the world.
“It can lead to temperament problems. In breeding is also strongly associated with a condition called HCD in young calves.
“The condition manifests itself as a pneumonia-related problem when the animals are about four months of age. It is normally fatal.”
According to Mr Behnke, dairy cows in the US are currently averaging between 13,000L and 16,000L per lactation.
“Production continues to rise. This is partly due to the growing preference for free stall barns and sand bedded cubicles.
“Tie stall barns remain popular in Northern states, where winters can be extremely cold.”