MISSISSIPPI STATE -- Milk prices are strong, but hot temperatures and high production costs are making it harder for dairy farmers to turn a profit.

Class I (fluid) milk prices are at all-time record levels, near $25 per hundredweight, which exceeds the previous record set in June 2004 by about 60 cents.

As extremely hot temperatures dominate the state's weather, milk production will decrease from the stressed cattle, and dairy producers will have less milk available to take advantage of those record prices.

Lamar Adams, Walthall County director with the Mississippi State University Extension Service, said the summer weather cooperated with dairy producers up to a point.

“Scattered rains in July helped farmers produce acceptable amounts of corn silage,” Adams said. “The rains also boosted hay production, so farmers are not as concerned about potential hay shortages as they were earlier in the summer.”

Pastures have been in better-than-normal shape for the first of August, but if the extremely hot, dry conditions and warm breezes continue, soil moisture will evaporate quickly, Adams warned.

“Milk production has taken a nosedive because of heat stress on the cattle,” he said. “Most dairy cattle in Mississippi are Holsteins, which are large-framed cattle. They start stressing when temperatures go over 70, but especially when daytime temperatures are over 90 degrees and nights are warm. The cows' first instinct is to stop eating when they get hot, and that results in decreased milk production.”

An additional South Mississippi problem is that Hurricane Katrina took out many of the shade trees in pastures. Some farmers erected man-made shade structures to help. The few trees that remain may suffer and eventually die from the concentration of cattle underneath them.

Production costs continue to dominate the factors impacting the industry's profitability in 2007.

Extension agricultural economist Bill Herndon said feed, fuel and fertilizer costs have increased substantially in recent years.

“Mississippi producers still find themselves in need of assistance to continue in the business,” Herndon said.

The Mississippi Legislature approved a no-interest loan program during the 2007 session to assist each qualified dairy producer with up to $20,000 for milk transportation costs. The application process for the program, which is overseen by MSU's Extension Service, began on July 1 and will continue through May 2009.

The loan application requires proof that the farm produced in a calendar year 300,000 pounds of milk, which is the amount of milk produced by about 20 cows. Farmers must provide evidence of the amount of milk shipped from the farm and the amount charged to their farm for shipping to a processing plant. Both figures are listed on monthly milk checks. This information can come from records between January 2006 and May 2009.

“We know it is a busy time of year as producers work their cattle and put up feed for the winter, but we need to get applications in as soon as possible,” Herndon said. “The state bonding office will not sell the bonds until we get applications totaling a certain amount. The maximum amount that can be paid out is $3.5 million.”

As of Aug. 10, dairy farmers have applied for about $500,000 under this no-interest loan program. State producers will need to request about twice that amount before bonds can be sold and money made available to farmers.