Due to a growing global economy, unpredictable water supply and rising feed costs, dairy farmers in San Joaquin County are bracing themselves for another uncertain year in 2011.
Farmers are optimistic that they won't experience a year similar to 2009, when dairy prices plummeted and farms were foreclosed on, but they aren't betting on dairy to unseat grapes as the San Joaquin's County's top agricultural commodity. Higher feed prices, coupled with less alfalfa being cultivated throughout the state, are squeezing dairy farmers. Constant regulations also create potential headaches for dairy farmers in 2011.
"It's real simple," said John Kaehler, of Kaehler Dairy on Armstrong Road. "For dairymen in 2011, it's going to be survival of the fittest."
The price of corn has steadily increased in recent years due to the growth in biofuels. Farmers who traditionally grew corn as feed for dairy cows are now getting a better price selling that crop as ethanol. With less overall supply on the market, farmers who do supply feed for dairies can bump up their prices. Dairy and corn prices have traditionally mirrored each other, but the use of corn for ethanol has changed all that.
California's uncertain water supply also hampers the dairy industry. With the state experiencing multiple years of drought prior to 2009, many farmers converted their alfalfa fields to other crops. Alfalfa has a fourto five-year life cycle and requires a steady water supply during that time. With less corn silage and alfalfa to go around, Hamm said dairy farmers could be exposed to exorbitant feed costs.
"Dairy farmers who don't grow their own feed supply are going to be hurting more," said Jack Hamm, of Lima Ranch on North Thornton Road.
Milk has historically been the top agricultural commodity in San Joaquin County, but winegrapes have replaced it over the past decade. Even though dairy farms around the county are thinning their herds, county Agricultural Commissioner Scott Hudson expects dairy to hold onto the No. 2 spot for the foreseeable future.
"There is such a wide gap between the second and third spot on the list, I don't expect dairy to fall," he said.
In San Joaquin County, each dairy farm operates independently and the overwhelming majority are family-owned. As small business owners, many dairymen and women feel cramped by California environmental and business regulations.
"There isn't one regulation by itself that is a problem," Hamm said. "It's the culmination of all of them. You basically need one person whose job is to do all the paperwork."
Even though the dairy industry in California can be viewed as a minefield, farmers are remaining optimistic and even looking overseas for potential revenue. California milk products, such as cheese and ice cream, are highly sought after overseas, and dairy producers are hoping exports can pick up in 2011.
Logistically, it's nearly impossible to ship fluid milk overseas.
"The timing issue of being able to get it to the place in time before it goes bad is a huge one," Hudson said. Dehydrated milk powders and manufactured dairy products make up most of the exports, and Kaehler is hopeful the trend will continue to grow.
"Because the market is flooded in this country, they tell you to increase exports," he said.
Contact reporter Jordan Guinn at email@example.com.