How falling milk prices affect my dairy cows

When milk prices fall, the first ones to suffer are the members of dairy farming families – Alex, Zoe, Wayne and me. The second ones are the people who make an income from supplying dairy farmers: feed merchants, vets, milking machine mechanics, fertiliser suppliers, the local newsagent and so on – our friends and neighbours. The next ones to suffer are cows.

With the price we are paid for our milk falling below the cost of production this year, I have some tough decisions to make and they come down to this: sell milkers, sell young cows, try to produce even more to meet our fixed costs (like the mortgage) or feed the cows less. Feeding the cows equates to about 40% of our income, so that’s a pretty obvious target and so is selling young stock.

It costs a lot (say $1500) to feed a young cow for two years until she’s ready to calve but, at about 12 months, I can sell her for about $1000. That’s very handy money when milk alone won’t pay the bills. Yes, it equates to selling the silverware but at least we live to fight another day.

Here’s the catch: if I sell her locally, she’ll probably be slaughtered at a value of, say, $500. If I sell her to a Chinese dairy farmer, I get the $1000. I’m assured that, as precious breeding stock, she’ll have a wonderful trip on the air-conditioned boat and she’ll join a herd of up to 30,000 other cows, with feed that arrives on a conveyor belt at their noses and whose manure is carried away by another conveyor belt at their tails. A very different life to the free range pasture based one she’d have here in Australia.

What should I do?