Given the latest PPI update and growing inflation, not many dairy farmers are looking to grow their operations right now.
Mike North with EverAg says producers across the country are hitting pause on expansion projects.
“Obviously, feed costs and overall input costs, and you can throw labor in there, the whole kit and caboodle, that ultimately is keeping people from expanding because they won’t want to walk into major capital expenditure and then have the floor drop out from underneath them with a high-cost structure. Nationally, we still have a quota system that is maintaining a presence in different geographies, also keeping people from expanding. Lastly, let’s say you’re not held by either of those concerns. Where are you going to find someone to build you a new free stall barn or a new parlor, and then what are you going to have to pay in terms of building materials to get that done? It’s really cost-prohibitive to think about expansion right now from that front, too.”
