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Dairy expansion possible for some producers
A market expert says there might be an opportunity for some dairy producers to expand, despite challenging economic times.
Mike North with Ever.ag says, “Instead of being overwhelmed by milk supply, most processors are always shopping to get their hands on an extra load here and there.”
North tells Brownfield there are processors who have lifted production quotas or stopped enforcing them, especially as new processing facilities prepare to go online around the country. “Will it be the wild, wild west of expansion? No, it will not but if done very thoughtfully and with a very forward-looking and financially oriented mindset, I think one can justify expansion as we look forward.”
North says dairy expansion will also depend highly on access to water and feed, and a regulatory environment that allows farmers to grow. He says eastern South Dakota has all three and dairy-dense states also have some growth potential.
North says farmers wanting to expand will have to make sure the result justifies the cost. “There’s going to be a big price tag to both build and fill a barn, so we can’t overlook those facts.”
North says with fifty to sixty million pounds of new cheesemaking capacity coming online soon, now is a good time for farmers to talk to processors to see where they might fit into the expansion picture.
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