Either way you slice it . . . on a per cow or per hundredweight basis . . . dairy farms lost money in seven major Western dairy states. That’s according to data from Frazer Certified Public Accountants and Consultants. For five of those states, this marks back-to-back years of net dairy farm losses with only Texas and Idaho posting a profit in 2015.

Losses were most severe in New Mexico where dairy farmers lost $358 per cow or $1.99 per hundredweight. This took place even though feed costs fell $73 per head from $1,743 to $1,670 when comparing the past two years.

That similar feed cost story played out in all other states too, with feed prices falling between $119 to $519 in five other states on a per head basis. California’s San Joaquin Valley led the pace at cost savings with the $519 reduction. Only one region, the Pacific Northwest, didn’t experience a significant reduction on feed with a mere $4 drop.

While falling feed costs was welcomed news for dairy farmers, milk prices that followed suit contributed to reduced margins as did sinking prices for cull cows and bull calves. That’s what led to more red ink for 2016 cash flow and on balance sheets.

Here is a snapshot of the financial data:

San Joaquin Valley, California:
In 2016, dairy farms lost $257 per cow or $1.18 per hundredweight (cwt.)
In 2015, dairy farms lost $208 per cow or 97 cents per hundredweight (cwt.)

Kern County, California:
In 2016, dairy farms lost $230 per cow or $1.05 per hundredweight (cwt.)
In 2015, dairy farms lost $145 per cow or 65 cents per hundredweight (cwt.)

Southern California:
In 2016, dairy farms lost $40 per cow or 17 cents per hundredweight (cwt.)
In 2015, dairy farms lost $7 per cow or 4 cents per hundredweight (cwt.)

New Mexico:
In 2016, dairy farms lost $358 per cow or $1.99 per hundredweight (cwt.)
In 2015, dairy farms lost $325 per cow or $1.94 per hundredweight (cwt.)

Arizona:
In 2016, dairy farms lost $201 per cow or 89 cents per hundredweight (cwt.)
In 2015, dairy farms lost $27 per cow or 14 cents per hundredweight (cwt.)

Idaho:
In 2016, dairy farms lost $78 per cow or 37 cents per hundredweight (cwt.)
In 2015, dairy farms gained $238 per cow or 98 cents per hundredweight (cwt.)

Pacific Northwest (Oregon and Washington):
In 2016, dairy farms lost $40 per cow or 14 cents per hundredweight (cwt.)
In 2015, dairy farms lost $30 per cow or 16 cents per hundredweight (cwt.)

Texas Panhandle:
In 2016, dairy farms lost $23 per cow or 12 cents per hundredweight (cwt.)
In 2015, dairy farms gained $68 per cow or 31 cents per hundredweight (cwt.)

For the complete Frazer LLP report, click here.

To read previous financial reports from this series, go to:

Finances among the toughest in California

If milk prices drop, margins could evaporate

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© Hoard's Dairyman Intel 2017
June 12, 2017
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