Market Forces In One Area Likely To Have Consequences In Others
By: Doug Busselman, Executive Vice President
As Congress was starting the process of figuring out the possible elements to be included in the stimulus package, a whirlwind of discussion was making the rounds with cattlemen from Nevada and other states quite fired-up over the chance that a dairy buyout would be included.
Even without the federal government being involved in a formal program, there is plenty of indication that milk prices are having the impact of dairy cows going to market. Prices for milk now are about half what it costs farmers to produce the staple, and consumer prices are falling. Unless the market can be bolstered, industry officials project that more than 1.5 million of the nation’s 9.3 million milking cows could be slaughtered this year as dairy operators look to cut costs and generate cash. This news account brings the matter to light.
As of Feb. 2, the price farmers receive for a gallon of milk has been 80 cents a gallon, less than half the $1.65 a gallon the California Department of Food and Agriculture estimates it costs to produce.
The American Farm Bureau Federation has also made note of the present situation in the dairy industry.
Consequences of the dairy cows being sold will not only potentially affect beef producers, but could also spill over to Nevada alfalfa producers in the form of less demand for the quality hay they produce.
While there may or may not be options for resolving the downward levels of red ink in the dairy sector, the linkage between various types of farmers and ranchers should not be lost on the details of this unfolding situation. It is also important to recognize that the fix is not going to be a short-term process.
As Congress was starting the process of figuring out the possible elements to be included in the stimulus package, a whirlwind of discussion was making the rounds with cattlemen from Nevada and other states quite fired-up over the chance that a dairy buyout would be included.
Even without the federal government being involved in a formal program, there is plenty of indication that milk prices are having the impact of dairy cows going to market. Prices for milk now are about half what it costs farmers to produce the staple, and consumer prices are falling. Unless the market can be bolstered, industry officials project that more than 1.5 million of the nation’s 9.3 million milking cows could be slaughtered this year as dairy operators look to cut costs and generate cash. This news account brings the matter to light.
As of Feb. 2, the price farmers receive for a gallon of milk has been 80 cents a gallon, less than half the $1.65 a gallon the California Department of Food and Agriculture estimates it costs to produce.
The American Farm Bureau Federation has also made note of the present situation in the dairy industry.
Consequences of the dairy cows being sold will not only potentially affect beef producers, but could also spill over to Nevada alfalfa producers in the form of less demand for the quality hay they produce.
While there may or may not be options for resolving the downward levels of red ink in the dairy sector, the linkage between various types of farmers and ranchers should not be lost on the details of this unfolding situation. It is also important to recognize that the fix is not going to be a short-term process.
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