Calif. expected to lose 100 dairy farms

The nation's drought and high corn prices are devastating California's $8 billion dairy industry to the point where farmers can't afford to feed their cows - and their professional trade organization has been regularly referring despondent dairymen to suicide hotlines.

Experts in the industry estimate that by year's end California, the largest dairy state in the nation, will have lost more than 100 dairies to bankruptcies, foreclosures and sales. Milk cows are being slaughtered at the fastest rate in more than 25 years because farmers need to save on corn costs. According to the Western United Dairymen, a California trade group, three dairy farmers have committed suicide since 2009, despairing over losing their family's dairies.

"I've never seen it as dire as it is now," said Frank Mendonsa, a Tulare dairyman who serves on the Western United Dairymen board. "Pride is just eating these guys up. People are calling me and asking me what to do. It becomes like a counseling session to stop people from hurting themselves. But it's not just losing our jobs that is driving the desperation. We're losing our houses, in some cases the same houses that our grandparents lived in, and we're losing our entire identities."

The problems started in 2009, when milk prices bottomed out and grain prices soared, partly due to the government's ethanol mandate. Congress is requiring that gasoline producers blend 15 billion gallons of ethanol, made from corn, into the nation's gas supply by 2015. Dairy farmers were forced to borrow against their land and cows to make their bills.

Read more: http://www.sfgate.com/news/article/Calif-expected-to-lose-100-dairy-farms-3946897.php#ixzz29IaSB7WG

California dairies are typically highly intensive operations where they don’t raise much of their own feed. Whereas the midwest and northeast dairy model is more classic (ie, 200 to 300 cows is a “big” dairy in the older midwest/northeast business model), and these smaller, more classic dairies raise their own feed for their own operations and supplant that with purchased feed, the California dairies (sometimes called the “California Dutch dairy model”) has a huge number of cows, uses only AI (no bulls), outsources the replacement heifer, feed and silage production. Their land costs are too high to just have the land sitting in crop production. The Dutch dairymen sharpened their pencil three decades ago and figured out that if they let everyone else to the “other things” in dairying and they concentrated on getting the most revenue out of every cow, they’d make a lot more money.

So that’s what they did. Like highly leveraged bankers, they’re learning the dangers of depending on leverage and outsourcing. Integrated operations have lots of advantages and flexibility when the crap hits the fan.

Ranchers, especially in the west, often have to buy a bit of feed to get over the winter, but ranchers are usually in the business of either producing a crop of calves every year (and usually shipping them from November to backgrounders or feedlots), so they have to feed only their cows and bulls over the winter. Calves (before this drought) would often be shipped to Texas or the south to pasture up to about 800 to 900 lbs (from 450 to 500 when shipped), and this is called “backgrounding.” After 850 to 900 lbs, the cattle are shipped to a feedlot for “finishing” where they’re put on grain or distiller’s grains (the remains of corn after ethanol production is pretty good feed). Other things you see in feedlots will be cottonseed hulls, sugarbeet waste, disposed produce, silage, haylage, etc. Cows can eat a great many things. Corn gets you the fastest gain because it has the highest metabolic energy per pound of feed, but barley works well, as do distiller’s grains, etc. Beef cattle don’t need super-nice feed. They need good energy in their feed in the winter, and they need a bunch of fiber in colder climates to produce heat to stay alive.

Dairymen, on the other hand, are in the business of feeding “fresh” cows - cows who are just about to drop a calf or who have just dropped a calf. They need wickedly high protein levels. Corn doesn’t have a huge amount of protein, it has metabolic energy - sugars and starches. This is good when the cows are starting to dry off or when they need to put on a bit of fat before being bred again. What dairy cows need most when producing milk is protein - and highly available protein. Alfalfa is still the best, most available protein for dairy cattle their is. Soybean meal is perhaps second. If you fed dairy hay to a beef cow, the beef cow would bloat up like a beach ball and be dead in about 30 minutes. Beef cattle don’t know what to do with the wickedly high levels of protein the California dairy model calls for feeding to a Holstein cow to produce over 22,000 lbs of milk per year. In the midwest model, they’re often happen with only 18,000 lbs of milk per cow per year.

Corn silage is used in the midwest and in some places in California, but corn silage this year will be highly regional in availability due to the drought. Silage doesn’t transport well due to the high moisture content, so it’s something that is produced locally and fed locally. Ethanol production might have effect on silage production, but it would be regional. If the ethanol plant quit buying grain corn before harvest or all the way back in September, some farmers who have cattle on their operation might chop some of the corn that would have gone to the ethanol plant.

The thing about silage that really limits it’s use to feeding very close to the point of production is that it doesn’t transport well. It’s very high in moisture, so about half the load you’d be sending down the road in silage is water. It makes more sense to haul foodstuffs that are dry - water you can get almost anywhere. Kernel corn, when dried down, is at about 10 to 14% moisture - any higher and the farmer starts getting docked on the moisture content when they take it to a terminal or ethanol plant.

The ethanol issue is mostly a non-issue for cattle on feed. Corn waste from ethanol distillation makes fine feed, and in many cases, better feed than just plain corn. Plain corn still has lots of available sugars in it which cause acidosis in cattle, so you have to convert a cow’s diet to corn slowly, lest it suffer from acidosis. Distiller’s grains still have a lot of complex carbs left in the aftermath without the sugars that have been fermented away. The problem is that distiller’s grains become expensive with the high price of diesel, and as the price of gasoline goes up, if the price of corn stays down, the profit spread on ethanol goes up. If corn prices go high enough, the ethanol plants will cut back because they’ll start losing money on the tight or negative spread on corn vs. gasoline.

The reason why I make a big deal about the cost of diesel is that US ag, being specialized as it is, requires cheap diesel to make it go. From planting to harvesting and everything in between, diesel goes into farming like you breath air and drink water.

Here’s another little factoid or two to impress people if you’re out and about:

Alfalfa comes from the region we now call Iran, at higher elevations.

Alfalfa was the only crop introduced into the US that spread from west to east. Alfalfa doesn’t like having “wet feet” - it is a plant truly adapted for deserts, and can send down roots quite far into the soil.

Somewhere I have a paper written by the early researchers in Nevada at Elko, showing an alfalfa stand that punched roots down 87+ feet into the soil, where the roots then came out in the roof of a gold mine.

it’s an amazing plant, but it is the only plant that allows such highly forced production of milk from a cow. Because it’s a legume (like peas, beans, etc) it can cause bloat, but because it’s a legume, it also fixed nitrogen into the soil.

The other thing the California dairy model depends on is the production of wickedly “hot” alfalfa hay. When you see alfalfa back east, you see fairly typical alfalfa. But in high desert situations, with chemigation through the pivot irrigation rigs (ie, injecting fertilizer into the irrigation water), you can grow alfalfa with lower fiber in the stem (which is what fills a cow up) and higher crude protein (which comes from having leaves the size of a quarter dollar). It’s not easy to grow that kind of alfalfa outside a high desert environment, where the nights are cold and the days warm.

As much as miss farming, I have to admit that as diesel costs rocket upwards (which takes all other inputs with them - fertilizer, parts, seed, etc) profits for a lot of farmers are going to become highly uncertain.

Yes, alfalfa is a perennial. A very hardy one, too. It has been adapted to change it’s dormancy onset to allow it to grow nearly year-round in the low deserts (eg, Imperial Valley, CA, Arizona) and go dormant early in places like Wyoming and Montana (which are usually two-cutting seasons). All by selective breeding over the last 80 years or so.

The plants you pictured are indeed alfalfa - the flowers can be white, creamy white, yellow, light purple, vivid purple (what you have there) and blue-ish. That picture is what “normal” alfalfa looks like: thinner leaves, a pretty upright growth habit, etc. The alfalfa we grew had much, much larger leaves than what you see in your pic - because of optimizing the soil nutrient load, irrigation which kept the soil moisture in the optimum range during the early growth periods, etc.

There are literally hundreds of varieties of alfalfa now; it is one of the most widely bred plants in US agriculture, with breedings that resist various insects, root nematodes, root rot, poor nutrition... you name it. There are varieties that will resist Roundup herbicide, altho I’m here to tell you that you could grow Roundup-resistant alfalfa simply by growing alfalfa in a very arid environment, waiting until it is slightly drought stressed and then spraying it. The plants that don’t die (which will be about 1/3rd of the total plant stand) will be somewhat resistant to Roundup. Harvest the seed off those plants, plant a new patch and in two years, repeat the drought stress and spraying. Within 10 years, you’ll have Roundup-Ready alfalfa without genetic modification. It’s one tough plant.

As for seeing on the sides of the road: What you’re seeing is seed dropped by hay trucks as they speed along. The alfalfa seed is literally about the size of a large pinhead - not quite as fine as coriander seed, but more like a poppy seed, only slightly smaller. If you allow a stand of alfalfa to go to seed and you have leafcutter bees for pollination, you will get hundreds of pounds of live seed per acre.

It’s called the “Queen of Forages” for a reason. It is without a doubt, one of the most flexible crops out there with some of the highest food value. In the western hay business, we called alfalfa “Ice Cream in the making...” hence the pun about Lucerne milk branding.

While alfalfa is a perennial, it does need to be re-planted occasionally. In Nevada, when we’d be cutting the stands for dairy quality, we’d have to re-plant every 5 to 7 years. A stand doesn’t reach full production for two years. If you aren’t cutting for dairy quality and you’d cutting when the plant is in bloom as in your pictures, I think you could probably get 15 to 20 years out of a stand.

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