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Photo: David Sommerstein
Photo: David Sommerstein

2014 could be a good year for dairy farms

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2013 was another comeback year for the dairy industry, after near-record low milk prices forced thousands of dairy farmers out of business during the recession. But the high cost of energy and feed still made it hard for farms to make money.

Two of the top industry forecasters say that could change for the better in 2014. David Sommerstein spoke with Mark Stephenson, who directs the Center for Dairy Profitability at the University of Wisconsin, and Andy Novacovic, a professor of agricultural economics at Cornell University, about what the new year might hold for dairy farmers and how the Farm Bill debate in Congress could affect life on the farm.

Stephenson says soaring corn prices are finally coming down, with a record harvest last summer and declining use of corn in producing ethanol. That means dairy farmers will pay less for feed, so they'll end up with better profit margins this year.

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David Sommerstein
Reporter/ Producer

Stephenson says lower corn prices mean cheaper feed and a bigger profit margin. "For dairy producers, this drop in the cost of producing milk is going to provide them a much needed cushion and a very good year," says Stephenson. "That said, I think it’s also going to be a stimulus for dairy producers to want to make more milk."

Stephenson says that could bring the milk price down some 80 cents per hundredweight in 2014. But he says the savings in feed costs will outweigh those losses.

Listen to David Sommerstein's entire interview with Stephenson and Novacovic about the coming year in dairy and what to expect out of the Farm Bill negotiations in Congress this month.

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