Special Report

Good times on the dairy farm

The WPS Farm Show completes its three-day run in Oshkosh, Wisconsin, on Thursday and there is no question there is a very optimistic feel at the show this year. Record cheese prices, April Class III futures over $23, May over $21, June above $20. Larry Johnson is with Greenstone Farm Credit, he says this is the best he has seen in his 15 years with Greenstone. He is seeing some plans for expansion but also some who plan to sit tight, pay-down debt and improve their equity. Each individual farm is different so each has to make their own plans.

One big factor to consider when looking at expansion is the price of cows, “We are seeing cows in lactation selling for $3,000 to $3,200 at auctions.” He also says some farmers are choosing to buy early-stage lactation cows to replace culls in an effort to “keep the bulk tank full” at these milk prices. Cull cow prices help make that decision easier.

Johnson does expect interest rates to keep nudging higher as the economy strengthens and the Federal Reserve pulls-back on their quantitative purchases. As those interest rates go up, he expects land prices will back down as investors look to other investment opportunities with better returns.

AUDIO: Johnson talks about the situation 6:31 mp3