Trouble could be on the horizon for dairy

SIOUX FALLS, S.D.(KELO)- Some major signs of trouble in the dairy industry.

There were 58 dairy farm permits that were dropped last month.

Lucas Sjostrom (SHOW-strum), the head of the Minnesota Milk Producers Association, says it’s common to see larger numbers of dairy farmers drop or suspend their permits this time of year.

But, he says 58 is a high number.

If nothing else, he says it underscores the tough business conditions for dairy farmers.

The “perfect storm” may be developing in the dairy industry to drive farmers out of the business.

Sjostrom says nearly 60 dairy operations dropped their permits last month.

Sjostrom says the high beef prices may be enough to draw some dairy farmers out of the dairy industry, allowing them to cut their losses by selling off their herds

Profit margins are razor thin in the Dairy Industry.

Minnesota is reporting a high number of dairy farms that are dropping out of the industry.

High beef prices and this year’s drought are factors.

Sjostrom says processing capacity is another.

Like many other areas of farming, it’s tough for the smaller dairy operators to stay profitable.

Minnesota is reporting a record number of dairy permits that are being dropped or suspended.

Like South Dakota, Sjostrom says the gopher state is seeing more large dairy operations.

Smaller operations have trouble competing with the large dairies…especially in the area of finding someone to process their milk.