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Since we last updated the profit margin outlook for dairy producers in 2011 back in January, things have continued to improve with forward margins strengthening through the remainder of the year into early 2012.
What was projected as a breakeven to slightly positive forward margin at best during the second half of the year is now decisively in the black as increasing milk values have more than offset the impact of higher feed costs that dairies will have to absorb on their herds.
This past year has certainly been one many dairy producers would just as easily like to forget. After a brutal year in 2009, profit margins remained negative through most of last year with depressed milk prices and high feed costs crippling operations.
Increased debt loads and lost equity have been the themes as many dairymen are simply trying to weather the storm and survive this current cycle.
After the past couple of years, one has to wonder if things can get much worse than they have been, as well as when or if the cycle may finally be turning for the better.
