A dairy consultant says the smaller rate of gain in the January milk production numbers indicates raising feed costs and full processing plants are causing farmers to slow production.
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“We’ve gone from 3.5% growth rate in November to a 1.6% growth rate in January and a lot of that came out of milk per cow.”

Mike McCully, president of The McCully Group, tells Brownfield expansion in a few select states is driving most of the growth.

“Roughly half of it was just in two states, being Texas and Wisconsin,” he says. “You throw South Dakota and Indiana in the mix and you’ve got most of the growth in the country.”

He says the number of licensed dairy farms has rapidly declined in the past few years and if the rate of decline continues, the number of dairy farms could drop by nearly half over the next decade.

“A lot of the numbers are coming out of the major states that have a large number of small farms—Wisconsin, New York, Minnesota, Pennsylvania,” he explains.

McCully believes anything beyond a two percent increase in milk production this year is too much based on current demand projections.

Nominations are open for Fonterra’s board election but a repeat of the drama that rocked the vote three years ago can be ruled out.

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