El Nino Risk and Fodder Security: The Biggest Threat to Dairy Margins in 2026
- Let's Dairy
- Jun 23
- 3 min read
Hello Everyone. Let me be direct with you, what's developing right now on the weather maps is not a routine monsoon worry. It is a structural threat to dairy farm economics across India, and most farm owners are not yet treating it as one.
What the data says:
IMD has lowered its 2026 southwest monsoon forecast to 90% of the Long Period Average (LPA), signaling below-normal rainfall across the country. A high probability of a very severe El Niño developing during October–December 2026 is projected by global climate models, with some indicating peak intensity exceeding +2.0°C in the Niño 3.4 region.
For reference: during the last super El Niño in 2015–16, actual rainfall recorded was 86% of LPA, with widespread drought-like conditions across the country. The current projections look similar.
What this means for dairy, specifically:
Most Indian dairy farm budgets are built around one silent assumption, that kharif fodder will be available at "normal" market rates from August onwards. That assumption is now risky.
Here is what typically unfolds in a weak monsoon year:
Green fodder collapses first. Maize, sorghum (jowar), and bajra, the backbone of kharif silage and green feeding are rain-fed crops. The monsoon core zone lies in central and western India, exactly where these fodder crops are grown and this is where deficit rainfall is most likely. Yield losses of 25 – 40% in poor El Niño years are not uncommon.
Dry fodder prices spike with a 2-month lag. Paddy straw, wheat straw, sugarcane tops all tighten by October-November as farmers restrict sale. On a 100-cow farm consuming 500 kg dry fodder/day, a ₹1/kg price increase adds ₹15,000/month directly to your feed cost.
Concentrate prices follow. Pulses, oilseeds production are all expected to be hit. This puts pressure on DOC (de-oiled cake), a primary protein source in TMR typically with a 3 – 4 month lag after the kharif assessment.
Milk output per animal drops. Heat stress intensifies when rainfall is below normal. Combined with nutritional stress from depleted pastures and rationed green fodder, expect 8–15% decline in peak milk yield on farms that don't have a buffer stock plan.
The margin squeeze is double-sided. Feed cost goes up. Milk procurement prices especially from cooperatives, rarely adjust fast enough to compensate. The result: farms running at ₹6 – 9 / liter net margin slip into loss territory by Q3.
What well-managed farms should be doing right now- June 2026:
Audit your silage position today. If you have less than 120 days of silage inventory per animal, you are exposed. Start bridging that gap before kharif sowing prices rise further.
Negotiate forward purchase agreements with fodder suppliers. Lock in maize stover and sorghum silage contracts for October–February delivery. Don't wait for the auction season.
Plant your own kharif fodder on every available acre. Even 10 acres of maize silage can buffer 200 animals for 2 months. Input cost: ₹18,000–22,000/acre. Silage value at October market rates in a drought year: ₹35,000–50,000/acre equivalent.
Build a dry fodder stockpile now. Wheat straw is still at relative normalcy. Buy 3–4 months' buffer stock before the October price spike.
Run your feed cost scenario models. Model your P&L at feed cost +20%, +35%, and +50% vs current. Identify the threshold where you need to reduce herd size or defer expansion. Do this exercise now, not in November.
heck your water infrastructure. Bore well depth, storage capacity, pipeline condition. Central and western India are expected to receive inadequate rainfall, water availability for fodder irrigation and animal drinking will be critical.
finally, make sure you have dairy fans installed and operational for this tough time for your animals. Cow comfort and cooling is no more a luxury but much needed investment with proven ROI in the form of consistent production, animal comfort, maintained breeding cycle and strong health and immunity.
A word on herd management:
This is also the time to cull unproductive and low-producing animals decisively. Carrying a 5-litre buffalo through a high-cost monsoon season is a cash drain. Tighten your herd efficiency ratio before feed costs peak.
Bottom line:
Dairy farming is a low-margin, high-volume business. It doesn't forgive complacency on input cost management. El Niño years don't destroy farms in one dramatic event, they erode margins quietly over 6 months until the P&L is unrecoverable. The farms that will protect their margins in late 2026 are the ones making procurement, storage, and agronomy decisions today.
Plan now. The monsoon won't wait, and neither will your feed cost.
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