Recession pushing dairy farmers over edge.(NY)

[amerikat]

Recession pushing dairy farmers over edge.(NY)

SARATOGA SPRINGS — The economic downturn that’s hurt many businesses is rocking the dairy industry to its very core.

The gap between income and cost of production has never been wider, forcing some families to contemplate selling off their herds, an extremely stressful decision that goes way beyond just losing a job.

Wood said it costs about $16 to $18 to produce a hundredweight (11.6 gallons) of milk. The price farmers are getting in return has plummeted to almost $10. In effect, farms are paying someone to take their milk away.

“I’ve never had a gap like this,” he said. “This $10 price is unheard of. We had a bad year in 2006, but nothing like this. Still, we struggled through. This time there’s no way. We’re going to operate on reserves or loans for the next few months.”

The problem is compounded by the fact that most banks and lending institutions don’t have credit to give. The federal MILC program provides a limited subsidy based on a farm’s size. Larger farms such as Wood’s get the least amount of help.

A couple of years ago farmers were getting $20-per-hundredweight for milk and never could have imagined that prices would drop nearly in half. Farmers are now getting paid what they were 30 years ago. In the meantime, fertilizer that once cost $150 now goes for almost $900 per ton. A tractor that cost $14,000 in 1975 would probably cost at least $79,000 today.

Full story at link. http://troyrecord.com/articles/2009/03/16/news/doc49bdd...

I live in Washington County and know a few dairy farmers. Why can't they take some cows out of production
to get the price up? Dairy farming is very hard work. I hate to see them operate at a loss.

amerikat

[customerserviceguy]

1. Well, then it's the middleman that's getting it.

Downstate here in Rockland County, they charge way more for milk than I ever used to pay out in the Pacific Northwest.