Thursday, January 27, 2011

YF&R profiles

Caroline and John Anderson


John Anderson runs one of the largest dairies in the State, he, wife Caroline and family live in Jerome County. I caught up with the Anderson's at the YF&R Leadership Conference in Idaho Falls.

A State report shows that Dairy made a big comeback in 2010, but it’s still a very tight market, what’s happening in the industry?

I think it’s a bit of a misconception that dairy has bounced back. 2010 was a better year especially compared to ’09 where we had lower feed costs and the milk costs were decent. Guys were able to make money, but there was a big hole to dig out of in ’09 in the dairy industry as a whole. Milk prices, while they look okay for 2011, with our feed prices, it looks like a break-even year similar to ’08 and’09. So we’re optimistic, I don’t know if that’s the word or not. We’re optimistic about milk prices but not feed prices.

What about herd size?

That’s the frustrating thing; we get these reports saying that milk was up 2-percent over last year yet herd sizes increased again. I guess that was surprising news with dairymen. I think really it’s just a function of guys looking at the bottom line and how they can milk more efficiently and lower their costs per hundred- weight. The easiest way to lower costs is to make more milk with your fixed costs. It’s more a function of guys trying to survive and doing what they can, that’s why you’re seeing the increase in milk prices. It certainly isn’t the profitability of it that’s driving it up, its guys just trying to stay in business.

Labor continues to be a concern—

Not just diary but across all agriculture. If it becomes even more difficult to get more labor it’s going to be harder to operate, it would affect dairies as much as anyone. Labor is definitely a concern that everyone has. Is there reform that could help? Yes, but it’s got to be the right kind. You have to allow people to come in and legally work. As long as they are here and obeying the laws, we certainly need it.

How’s the availability of feed this year?

As far as dairies are concerned corn, corn silage, grain corn and hay, I don’t think anyone knows what’s going to happen with hay, there’s a bit of a shortage of it right now. I don’t know if anyone knows where hay will be next year. Look at future markets on corn; it could have a huge impact on our feed prices.

So in 2011 what’s the outlook?

Our hope is to just to get through survive and break even in 2011 and we will be happy.

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