Just as milk prices are improving, fierce competition for hay and limited water supplies to grow other feed crops have dimmed the outlook for California dairy farmers.

Poor range conditions due to drought have forced many beef cattle ranchers and sheep producers to feed more hay, depleting inventories and pushing prices up for dairy farmers, Fresno County dairyman Donny Rollin said.

"There's not a lot out here right now, so everybody is scrambling for the same stuff," he said.

He noted that even though he has purchased hay recently, scheduling a delivery has been difficult, as busy truck drivers hustle to drop off all the loads.

Tulare County dairy farmer Tom Barcellos said lack of surface water deliveries from the Friant Unit of the Central Water Project and inadequate groundwater supplies will likely force him to fallow 30 percent to 40 percent of his silage-crop acreage this summer. He said he may also have to abandon some of his alfalfa acreage in order to stretch his water supply to grow additional forage for next fall and winter.

"If we don't get any rainfall, I don't know what I'm going to do, because I don't even know that the water table can sustain the wells that are going to water the cows and wash the milk barn down," Barcellos said.

While a robust U.S. corn crop has helped to moderate corn-grain prices for dairy farmers, prices for other feed commodities such as soybean meal and cottonseed have continued to escalate. Now, California dairy producers can also expect to feel the pinch from local sources of feed, said Peter Robinson, a University of California Cooperative Extension dairy nutrition and management specialist.

He said he expects there will be reduced availability of all feed crops if drought conditions do not improve significantly. Dairy farmers will see their production costs increase, as they look to buy feed from out of state and maybe even offshore, he added.He noted that winter wheat silage, which is planted in the fall in the San Joaquin Valley, is usually germinated by rainfall, but this year, many growers have had to irrigate to get the seeds to sprout. Because farmers probably won't want to pump much water to support the crop, Robinson said, he expects there will be less production of winter wheat this year.

He said he also expects feed-crop acreage in the San Joaquin Valley to see a significant shift away from corn silage toward sorghum, a less thirsty crop.

"Unfortunately, sorghum doesn't have the same nutritional value to dairy cows that corn does," he said, and that will impact milk production.

Also, with water shortages to bring less cotton acreage in the valley, there will be reduced supplies of cottonseed, an important source of energy and fat in the dairy ration, Robinson noted. With cottonseed prices already elevated and expected to go higher, he added, dairy farmers may choose to feed more forage as a substitute.

"But if you're also dumbing down the corn silage by converting it to sorghum, then you're going to have problems formulating rations that continue to have high milk flows," he said. "Overall, I don't think there's any way that we don't see a reduction in milk production over the summer."

Rollin said he already grows sorghum as part of the feed mix for his heifers but noted that corn silage and wheat silage are still the best forages for his milking herd. Over the years, he's made use of alternative feeds such as culled fruits and vegetables, including citrus, pomegranates, peaches, onions and asparagus, as well as bakery waste. This year, he's also going to start feeding soy hull pellets, a byproduct of soybean processing.

"Farmers are pretty ingenious about figuring a way to feed cattle," he said. "If there's anything of any value anywhere, it's getting gobbled up."

But with orchard farmers trying to save water to keep their trees alive, Rollin said there will be fewer acres of vegetables and other row crops that have been a source of dairy feed.

Barcellos, who also planted sorghum last year due to tight water supplies, said dairy farmers do not normally compete with beef cattle ranchers for the same feed, because beef producers usually have plenty of grasses on rangeland to graze their cattle and they also supplement with feeds that work well for beef cattle but not necessarily for milk production.

"This time, we're going to be in a situation where if there's a bale of hay that's got a string around it, everybody wants it," he said.One feed product for which dairy farmers might be competing head on with beef producers this year is almond hulls, which are a big part of the dairy feed mixture, Robinson said.

While some cattle ranchers have already begun to shrink their herds due to dry pastures and lack of available feed, Barcellos said he hopes he won't need to make reductions on his dairy. But he noted that dairy farmers will have to make those considerations if they don't have enough feed.

Concern about available forage supplies may pressure some dairies to scale back their cow numbers, but higher milk prices may also drive them to increase stocking density, Robinson said.

Even though Fresno County dairy farmer Steve Nash grows about 70 percent of his feed and describes his farming location as a good area for groundwater, he said he's focused on maintaining his herd and trying to pay back some of the debt he's incurred in recent years.

While some dairies may be expanding to take advantage of higher milk prices, Nash said he thinks many of them will be "holding back and trying to improve their financial situation."

Source - http://www.dairyherd.com/