Area farmers, ranchers unsettled by price fluxuations

Prices for alfalfa, beef cattle and dairy products - three of the largest pieces of Nevada's agricultural economy - have rebounded, but farmers and ranchers remain uncertain about their prospects in 2011.

Hay prices in Nevada rose substantially from their yearly low of $93 a ton in May. Alfalfa hay sold for $122 a ton in October, its highest price all year - but that's still about 33 percent lower than the high mark of $182 a ton in January 2009.

Rick Lattin, a longtime Fallon-area farmer, expects that the recovery in prices for alfalfa hay that began in 2010 should continue in the coming year.

Lattin, who has about 300 acres of organically grown hay, says the key for farmers in 2011 is to manage their crops the best they can in order to receive the highest price possible for premium, weed-free alfalfa.

"If you can grow high-quality alfalfa, prices are pretty good," says Lattin, who moved early in the year to hedge the price for his crop and was unable to capitalize on this year's modest price gains.

Fluctuations in feed prices have had a dramatic effect on the state's dairy farmers, who primarily operate in Churchill County. In 2009, the price for a hundred pounds of milk - which equates to 11.6 gallons - was well below operating expenses for Fallon-area dairymen.

Many farmers were forced to cull their herds to cut losses, but pricing in 2010 bottomed out in March and inched back to $18.71 in November - the highest price Nevada dairymen have seen in several years.

However, the price for milk to be delivered in January is $16.45, a decline of 23 percent in just two months, says Tom Orzech, operations manager for the Nevada Dairy Commission.

"It is definitely much better than $11 and $12, but now it is correcting back down," Orzech says.

Orzech notes that ethanol prices also will impact the bottom line for dairymen in 2011. Because ethanol producers compete to purchase corn crops, higher prices for ethanol result in higher prices for corn - and that boosts the production costs for Nevada's dairy farmers.

For Nevada cattle ranchers, uncertainty about the world economy and U.S. feed prices have them slightly leery about what 2011 will bring.

Nevada ranchers have seen strong prices in recent months - $107 per hundred pounds for feeder cattle sold to ranches for fattening. However, rising gain prices and a worldwide shortage of wheat could trickle down to adversely affect Nevada ranching operations.

"Shortages will drive up feed prices for producers," says Ron Torrell, a former agricultural specialist with the University of Nevada, Reno.

"They can't pass all those increases through, so as profits begin to diminish they get squeezed and sell off their cattle supply to packers and slaughterhouses who are seeing larger supply, so they pay less. Eventually that comes back onto feeder cattle prices."

c