Milk producers in the nation's third largest dairy state are beginning to feel the effects of low snowpack levels last winter. They figure to last well into 2014.
Between August 27 and September 5, irrigation districts in the Magic and Treasure Valleys in southern Idaho, which account for the majority of the state's milk, corn and alfalfa production, stopped making water deliveries for the rest of the growing season due to low supplies. That's four to six weeks earlier than normal.
The early shutoff was not unexpected, however, so most corn farmers planted shorter season varieties. But alfalfa is another matter. The immediate effect on that crop will be four cuttings this year instead of the usual five. Other impacts will play out for many months for dairy producers, including less local hay and greater competition for all feeds. Higher prices seem inevitable.
However, the timing of the water shutoff also coincided with a dip in the corn futures market to less than $4.70 per bushel, giving producers an opportunity to book their major feed needs at attractive prices.
(c) Hoard's Dairyman Intel 2013
September 16, 2013