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Milk Producers Ask For Help As Prices Plunge

posted on March 27, 2009

March may have come in like a lion this year, but it's certainly not going out as a lamb in many parts of the nation.

An early spring blizzard dumped up to 17 inches of snow in Denver Thursday. Further east, heavy thunderstorms spawned tornadoes in the Midwest and parts of the South.

But the worst problem appears to be in North Dakota where the Red River broke a 112-year record early Friday morning by climbing 22 feet above flood stage in Fargo.

More than 1,700 National Guard troops contended with snow and sub-zero windchills this week as they assisted volunteers in sandbagging efforts in response to the devastating flood.

Even as Mother Nature wreaks havoc on the high plains, farmers in other regions are contending with a perfect storm of lower commodity prices and higher input costs. Among those hardiest hit are the nation's dairy producers. This week though, the Agriculture Department intervened on their behalf.

Milk Producers Ask For Help As Prices Plunge

In January of 2008, dairy producers were receiving an average of $20.55 for every 100 pounds of raw milk but now that amount is hovering around $11.00 -- a drop of nearly 50 percent. Officials at the National Milk Producers Federation, or NMPF, say the amount being paid is 25 percent below the cost of production.

The dramatic drop in prices has prompted the NMPF to ask the Obama administration for help. In response, Secretary Vilsack this week authorized USDA to purchase 200 million pounds of nonfat dry milk for the federal school lunch program and food banks. The action is designed to help bolster prices because the milk was purchased at a much higher federally mandated level.

Jerry Kozak, president of NMPF, applauded Vilsack's move and asked the Secretary to consider additional purchases of cheese and infant formula as well as resurrecting the dormant Dairy Export Incentive Program to help boost overseas sales.

The low prices and high costs have forced some producers to send more cows to the slaughter house. USDA reported that 262,500 cows were butchered in January of this year -- almost 44,000 more than a year ago. Unless prices improve, industry officials predict that 1.5 million of the nation's 9.3 million dairy cows could be sent to the processing plant.


Tags: agriculture dairy markets milk news