California dairy country is feeling the squeeze again.
Milk production is steady but input costs are creeping higher and that is tightening margins for producers. Feed remains the biggest concern with hay and ration costs staying elevated compared to where many would like to see them.
Labor and regulatory costs are also part of the equation. Producers are continuing to adjust operations to stay efficient but there is only so much that can be trimmed without impacting production.
Some dairies are locking in prices where they can while others are riding the market and hoping for stronger milk checks ahead. Export demand is holding up but not enough to completely offset the rising cost side.
The result is a cautious outlook. California dairies are still producing but every decision right now is about protecting margin and staying in the game.