Winter is my least favorite season, especially on the farm. Every morning you break the ice out of the calf water buckets, and making sure lines are emptied and doors are shut tight is an every-evening routine so that nothing freezes up in the barn. Double checking all the animals becomes even more important, as pneumonia and other illnesses can be brought on quickly by the colder weather. No amount of hand lotion seems to relieve the dry hands and chapped face that come with working outdoors in the colder weather. And, with the sun going down earlier in the evening, fatigue seems to occur more frequently in the winter than in any other season.
Some would argue that we are in a winter season right now when we look at dairy markets. Since June, we have seen our mailbox price drop from above $20 per hundredweight to just above $16. Although feed costs remain low, higher insurance, labor, utilities, and other costs are putting strain on our margins, with this month’s milk check not going as far as needed for many of us. Higher beef prices help, but that income only comes if you have cull cows or bull calves to sell. Those who are working on growing their herds may not want to cull cows to subsidize your income. It may feel a lot like the brutal cold temperatures in wintertime. While we know prices will rebound at some point, weathering through the downturn can feel like an exhausting, if not impossible, feat.
Philosopher and author Albert Camus once said, “In the depths of winter, I found within me an invincible summer.” I believe that is true for all of us. Have you ever noticed how you mind the cold so much more in the beginning of winter than you do by the end? In December, I am miserable in 32 degrees. But, by February, temperatures much lower than that do not seem to bother me. That is because our bodies learn to adjust.
In some ways, we could compare this season to being in the depths of winter. Put plainly, it’s up to each of us to get creative in adjusting and working through it. Despite the incredibly cold weather winter can bring, farm families and employees still focus on what we do day in and day out – we get the cows fed, get them milked, keep them clean and bedded, and make sure they have fresh water to drink. We focus on the essentials, and although sometimes it takes a significant amount of patience and perseverance, we work through it until the weather warms up and things thaw out.
So, for dairy farm families, what are some of those essentials that need focus in this “winter” season in the dairy markets? Here are a few suggestions to consider for your farm.
- Know Your Situation. Class III milk futures prices on the CME currently average below $16 for the next four months, while Class IV futures prices average below $14.50. Even with low feed prices, margins are expected to be below $9.50 a hundredweight for the next ten months. If you do not already know your cost of production, right now would be a good time to figure it out, especially with the start of the new year and the expectation of lower margins into spring.Your cost of production is how much it costs your dairy to produce a hundredweight of milk. It seems like a simple number, but the truth is, many farms do not know their cost of production. In Pennsylvania, costs of productions can vary as much as $10 per hundredweight between farms. Knowing yours is the first step in determining how capable you are of working through the next six months and what you’ll need to get through. If you want help calculating your cost of production, Penn State Extension and the Center have worksheets available that can help.The Center’s Dairy Decisions Consultant Grant may help, too. The grant provides funding for you to be paired with an outside consultant to look at your whole farm situation, including your financials, and offer options for moving forward. It may help you uncover a path forward that you hadn’t considered before.
- Consider Your Options. Once you know what the numbers look like, you should consider what options are available to you. Diversifying your income is always a solution to work through any downturn. However, diversifying usually takes time and additional capital. Managing costs, reducing labor expenses, or having a spouse take an off-farm job might be short-term solutions to ease the stress. Taking advantage of risk management options available to you is also a good strategy to have in place.USDA opened enrollment for the 2026 Dairy Margin Coverage Program Year on January 12, which will close on February 26. All dairy farm families should consider enrolling to have that catastrophic coverage against low margins. Currently, the markets are forecasting a net benefit through DMC of $8,300 per million pounds in 2026. The Dairy Revenue Protection Program is another option, offering market-based price coverage – essentially putting a floor under your milk price — for the next five quarters, from the second quarter of 2026 through the second quarter of 2027. To learn more, contact your crop insurance agent or talk to your milk market cooperative representative.
- Communicate. Whatever strategy you take to work through the situation, the most important thing is to communicate with those closest to you. Make sure you are talking openly with your partners, family members and employees about the situation. Seek their advice and the advice of your closest advisors – your banker, accountant, veterinarian, or nutritionist. Bring those key partners into the conversation early and try hard to make those conversations focus on solutions, not just problems. They may be able to suggest solutions that you have not yet considered.Pulling together a dairy profit or management team can be an effective way to aid in that communication. A profit team meets a couple of times a year or quarterly to discuss opportunities and address bottlenecks you might be facing. Bringing more perspectives into the decision-making process can often lead to better decisions and a more profitable dairy. Penn State Extension agents can help with facilitating a team, if you are interested in that approach.
- Keep Your Friends Close. Humans are inherently social creatures. We need that social interaction to maintain our spirits and stay motivated. Especially in the wintertime, it can feel easy to isolate yourself and hunker down. However, studies prove that isolation can significantly harm both your mental and physical health, which will only compound the stress you feel. Find ways to connect. Connect with a neighbor over the phone, meet a friend for coffee, or participate in your community and church activities, even if they are virtual.One opportunity to connect with others in February is our Pennsylvania Dairy Summit, being held February 4 – 5 at the Holiday Inn in Grantville, Pa. We are working to incorporate networking opportunities and fun activities to create opportunities to interact socially with other farmers. Sometimes engaging in an activity like the Summit can provide a much-needed reprieve that brings you back recharged and refocused on finding solutions. We do have a handful of first-time farmer coupons available to farmers who have never attended the Summit before but would be interested in attending. To learn more, contact Allen Hess by email or at 717-346-0849.
- Take Care of Yourself. Remember what matters most is your health and personal well-being. Stress can take a serious toll on your body and mind. Just dealing with the cold temperatures of winter can be stressful enough. Having financial stress on top of it can be overwhelming. Find ways to relieve stress and stay positive. If you do feel overwhelmed, find people you can lean on for guidance and support, whether it is a loved one, friend, or your pastor. Do not ever try to carry the burden on your own. If you see a friend or loved one struggling, you may find some ideas here to help them work through it.
Every winter has its spring, and even in our current situation, spring will arrive eventually. It is up to each of us to find within us that invincible summer to work through whatever it is we are facing. Remember, the Center for Dairy Excellence is here to help. If you want help understanding your cost of production, utilizing our grants, exploring your risk management options, or even just accessing the other resources we offer, please give us a call at (717) 346-0849 or visit our website at www.centerfordairyexcellence.org. To learn more about the Dairy Summit, go to www.padairysummit.org.
Editor’s Note: This column is written by Jayne Sebright, executive director for the Center for Dairy Excellence.