MAINE, USA — Dairy prices are likely to remain high for the next few months, an analyst says, as prices for grain, fuel, and more rise. Some Maine dairy farmers say those factors are leading to higher-than-usual expenses.
Higher milk prices
Milk prices have climbed close to record highs, and expenses have increased simultaneously, according to Lucas Fuess, director of dairy market intelligence at HighGround Dairy, a brokerage firm that provides things like market analysis and strategic planning for the global dairy industry.
These high expenses are decreasing the profit potential that could typically come from higher milk checks to farmers, according to Fuess.
"Whether feed, labor, diesel, fertilizer, interest or other input costs, multiple challenges have increased the cost of dairy farming," Fuess said. "Dairy prices have been supported on both weaker milk production and firm domestic and global demand for dairy products."
Dairy prices are likely to stay high for the next few months, according to Fuess. He added there are several cautionary economic warning signs that could threaten prices in the future.
Higher expenses for Maine dairy farmers
Josh Tracey is with Triple D Acres in New Sharon and told NEWS CENTER Maine, "Every single thing's gone up in price. The grain is also a big one."
Tracey uses wheat to keep his cattle feed pellets together.
The dairy farmer said his farm gets grain from a company in Vermont, and he had to switch sources because his previous supplier had logistical issues getting full loads delivered. Higher fuel prices played a part in that, according to Tracey.
Higher grain prices mean a lot more expenditures for Triple D Acres.
"How high is it gonna keep going?" Tracey said. "It's a little unpleasant at the moment, but hopefully, we can persevere. I'd like to hopefully have some optimism."
Tracey said Triple D Acres can't raise prices to offset higher expenses because the company that buys his milk sets the price.
"We're kind of stuck at what they give us for a price," Tracey said. "I can't necessarily change the price.
The dairy farmer said Mainers would probably see milk prices rise in a later quarter this year.
"There's probably a good chance of it with inflation rates and everything," he said. "Yes, they're probably gonna increase. But I don't have a crystal ball. Everybody's kind of feeling that, not just the farmers."
Tracey added there are still plenty of farms "hanging on." He admitted it's tough right now.
He started working on the dairy farm as a kid.
"I was a real young boy," Tracey said.
His grandparents owned Triple D Acres, and he went off and "did some service stuff" before coming back. Tracey has been back three years now, and he's slowly working on taking the farm over.
Andy Smith is co-owner of The Milkhouse in Monmouth. It's a certified organic dairy farm.
Smith told NEWS CENTER Maine the price for the farm's organic dairy grain has increased around 15 percent from this time in 2021.
The Milkhouse is planning to switch away from organic feed for its pigs, at least for this season, because the increasing price for organic grain is forcing its price point beyond the reach of some of its customers, according to the co-owner.
In addition to grain, Smith said off-road diesel has roughly doubled since 2021.
"Fortunately for us, our cattle graze all growing season, which, among other things, dramatically reduces our diesel consumption," Smith said. "However, these fuel price increases must be especially painful for herds where that is not an option."
Smith added the cost of diesel and other inputs like baler twine and plastic wrap is driving hay prices up dramatically for the season.
The Milkhouse processes all its milk on-farm and has had to raise its milk and yogurt prices once in the last few months to accommodate the increased expenses, according to the co-owner.