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SUPPLY CHAIN EXPERT SAYS CALIFORNIA DAIRIES MAY MOVE TO MIDWEST FOR CHEAPER FEED, WATER
Jan. 25, 2023
Agri-Pulse reports:
Some California dairy producers are looking to move to the Midwest to lower their production costs, according to Katie Burgess, director of risk management at Ever.Ag, an ag technology company.
California producers face costs $2 to $3 per hundredweight higher than their Midwest counterparts pay, Burgess says. "If you put yourselves in the shoes of a dairy producer, the outlook for the next 12 months is as dim as it has been," Burgess says. She spoke on a panel at the Dairy Forum.
The I-29 corridor in particular is a "hotspot" for dairy farm expansion, she says.
Bottom line: Sara Dorland, managing partner for Ceres Dairy Risk Management, says dairies will move to where water and feed are available. In the late 1980s and early '90s, there was a great migration of dairies to the West because of expansive amounts of land, water and inexpensive feed.
"I don't think that means we're going to turn the lights off on the West. But I do think it just means we could see a bit more consolidation," Dorland said. California's dairy production will help service the growing demand for dairy exports to China and southeast Asia.
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