Milk Prices

southeast, NE

Thought people might be interested in seeing what dairy operations are dealing with.

http://rss.farmprogress.com/rssStory.aspx?si=38161&ci=0&st=5

Panama, NY(Zone 5a)

I can't begin to tell you how California prices milk. They are a completely separate entity in the milk world. We are in the Mideast Order 33, a federal milk marketing order. Our price has gone from $21 a hundredweight last January to $15 in December. I can't tell you what January 2009 is yet as we haven't gotten that check, but I can tell you while we were losing more than 25% of our pay price we were paying 25% more for feed, 50% more for fuel and 33% more for fertilizers and lime. And the fuel and fertilizer percentages would be higher, but we cut back usage as much as possible.

I'm impressed if Californians will really see a 50 cent drop in the cost of a gallon of milk. It never seems to work that way around here.

The bottom line is that any marginal farms are going to find themselves out of business if this continues. Fewer farms is not something that this country really needs. We, farmers, are all ready less than 1% of the population.

southeast, NE

Kathleen - didn't the price of milk drop several months ago? I brought this up because I know that dairy operators are struggling.

San Francisco Bay Ar, CA(Zone 9b)


Quoting:
The minimum price determination is made on a monthly basis by the California Department of Food and Agriculture, which bases its decision on market factors and price surveys.


And therein is one of my complaints with the CDFA. Do you see the concept of "net production cost" in there anywhere? I find this disconnect alarming. Yes, I understand that there is a desire to keep food costs low, especially in the current economy, but we cannot continue to do this to the detriment of the folks producing quality food. Arggh!

Panama, NY(Zone 5a)

The cost of producing a hundred pounds of milk hasn't factored into the minimum pay price for decades. And when farmers complain, we are told that any effort to give us more money would take milk out of the mouths of babies.


Milk prices in Federal orders started falling early last year. I think February was the last month we got over $20. Here's a link to a page from Univ. of Illinois that says in 2007 it cost $18.43 to produce 100# of milk.
http://www.farmdoc.uiuc.edu/manage/enterprise_cost/FBM-0160milkcost.pdf
I've only skimmed the first page, but it sounds pretty close to what we got that year.

This message was edited Feb 12, 2009 7:25 AM

San Francisco Bay Ar, CA(Zone 9b)

The dairies I buy from bottle their own and sell directly to the public. This keeps them off the commodity market. We do pay more for our milk but I think the pricing is fair. I can't drink the regular coventional milk anyway, so it's either pastured dairy from the local farms I know or no dairy at all for me. Even with the higher prices, the demand still outstrips the supply. Looking at the folks lined up at the milk stall at the farmer's market, I'd say most of the customers are average middle class. Our farmers markets have been more crowded than usual since the ecomony tanked. I think a lot of people are afraid to buy supermarket food now for fear of salmonella or other contamination (like melamine)

Lewisville, MN(Zone 4a)

Good, the big grocery people like Wally World can go back to selling clothes & junk like they originally did & leave the groceries to people who know what they are selling. Farmers markets are a good start. When I graduated from high school, that summer I worked in a produce department of a local grocery store. All produce that was possible to buy from local people was bought from them. Other things were bought by the parent company from growers, not the big brokers like now. Only thing that came from out of the country was bananas.

We were just talking about milk at coffee shop this morning. The town I grew up in had a dairy right on the edge of town. For a long time they delivered milk in returnable glass bottles to the homes. Then the government thought it would be a good idea to regulate things, so they outlawed home delivery. So the farm set up a drive up window on the farm & people drove out & picked up their milk. Along comes BIG government & required all kinds of inspections & licenses. Farm quit the bottling of milk & sent it off to the plant.
So instead of reusable bottles & local product, you get to throw away the cartons & don't know where the milk comes from.
Now they are trying to eliminate people like Kathleen & AnnaZ who milk around 50 cows & take very good care of them. They would rather have the big factory operations.

I wish we had a farm we could buy milk from, but there are no milk cows near here. All small farms are out of business in this area.
Bernie

Panama, NY(Zone 5a)

I'll freeze up some milk cubes and sent it out, Bernie! Oh, that I could.

Paris, TN(Zone 6b)

I haven't found any raw pet milk in our area yet, so we're getting it when we are in Atlanta from the dairy farmer that we know that sells at the market. I don't think that we pay very much considering the quality we get for our pets when we buy it, especially compared with supermarket organic milk. We pay 7.00 a gallon either at a pick-up site or on farm.

Since getting our own dairy cow has been put on the back burner until we get our own land, this is the best I can do. I'll probably get a freezer in a few months so we can stock it and possibly make some butter again. In the interim, I'm happy we can get what we can :) I'd sure help you out Kathleen if we were near.

Panama, NY(Zone 5a)

I appreciate the thought, but in NYS, we aren't allowed to sell raw milk even for pets.

Lewisville, MN(Zone 4a)

No raw milk here either. I wouldn't drink it raw anyhow. I drink skim milk all the time if possible, at least a quart a day.

San Francisco Bay Ar, CA(Zone 9b)

If you think phone calls and letters from out of state folks will help influence your regulators to protect small farms in your states, please let say so.

Sometimes it's helpful, sometimes it backfires because it's viewed as interference by other states. Our senate, assembly and state ag dept heard from folks all around the world when SB201 was working it's way through the houses. The bill passed both and then was veto'd by the governator. We're not giving up though! A new bill will be reintroduced this year and more people are getting involved.

Lewisville, MN(Zone 4a)

Just on the news, milk is lowest in years & going down another 40 a gallon soon. They figure lots of cows will be heading for hamburger shop!

San Francisco Bay Ar, CA(Zone 9b)

And yet the US imports fluid milk and dried milk products from other countries. Does this make any sense?

Panama, NY(Zone 5a)

It never has made any sense. My thoughts about the NYS milk laws are best left unsaid, and I really don't think that out of state comments would be helpful here, but I appreciate the thought.

Panama, NY(Zone 5a)

We got our final check for January yesterday. The pay price was $14.24. That's about $1.19 a gallon.

Panama, NY(Zone 5a)

We participate in the NYS Dairy Farm Business Summary every year. Stan does the paper work for that and the taxes at the same time. We got a copy of the 2007 books when the Extension agent came to get the numbers for 2008. These figures are averages for all the farms reporting.
In a cross section of all dairies, the average cost per hundredweight was $18.11. For intensive grazing dairies the average cost per hundredweight was $15.73. Our cost per hundredweight was actually a dollar less than that. These figures are for 2007, before fuel, fertilizer and feed prices increased by 50%, 33% and 25%. When you compare this to the current pay price of $14.24, it makes you wonder what kind of crazy people do this for a living. Oh, yeah, that would be us!

Waddy, KY

I think that explains why our county has gone from over 1000 dairies in 1970's to 26 currently. Was 27 but a three generation farm milked its last cow on January 4.

Paris, TN(Zone 6b)

So, it costs you more to produce the milk than you get paid for it? Oy vey! I read somewhere recently that the problem is that we have too much food, which drives the price down; and not equal distribution of the food, which means people starve in some places while others have food that goes to waste.

There is something inherently wrong with our systems....

Panama, NY(Zone 5a)

The problem is extraordinary complex, but basically the government made a strong commitment to keep American food cheap.

San Francisco Bay Ar, CA(Zone 9b)

Cheap on the surface only. It's expensive when you look at the big picture of how the current program has destroyed many local food supplies and communities.

Panama, NY(Zone 5a)

Yes, but to discuss it here would be a violation of the AUP and I really don't want to go there. What the American public doesn't know about the market manipulations can' be covered here.

Sapello, NM(Zone 5b)

I've appreciated reading these postings.

I'll bet you could post some websites and resources that would be very informative for those of us ready to move beyond...

Compassionate Carnivore by Catherine Friend
Omnivore's Dilemma by Micheal Pollan
Animal, Vegetable, Miracle by Barbara Kingsolver
The Small Farmer's Journal

and not violate the AUP.
=0) Jay

San Francisco Bay Ar, CA(Zone 9b)

Too true. *sigh*

southeast, NE

What am I missing here? I started this to show people how low milk prices are and what dairy farmers are dealing with now. For some reason I have the feeling this is turning into a "if you aren't a small farmer who only sells organic and/or local", a farmer doesn't deserve to succeed.

San Francisco Bay Ar, CA(Zone 9b)

I'm not sure how you got the impression that anyone thinks any particular farmer doesn't deserve to succeed from the discussion here.

The discussion has been primarily about the frequent disconnect between the cost of production and the price paid for the milk. This was the basis of the article you posted. Basing the price paid to a producer based on a global commodity pricing scheme has a lot of flaws and has put many producers out of business.

Many communities would like to have a local supply of staple foods. Local food production means local food security. In this area, we are trying to protect our remaining local dairies (and ranches and farms).

What does that have to do with someone "deserving" or not deserving to succeed?

Panama, NY(Zone 5a)

That seems to be a theme that gets loose here. We have friends who have 35 cows and other friends who have 1000 cows and both produce a very high quality product in very different ways. You just aren't going to see the American farm population revert to small farms. The economy and the population are no longer of a size to allow it. There is, however, a movement to more grazing farms of all sizes. It's all about management, herd health and keeping the cost to income ratio on the plus side. The 1000 head herd is cared for at a very high level of concern for cow comfort and health. I don't know about any place else, but the guys who trash their cows here, go under in short shrift.

San Francisco Bay Ar, CA(Zone 9b)

Thank you for clarifying Kathleen.

It will be interesting to see what American farms looks like in 10 - 15 years.
The 2007 Census of Agriculture shows that we have added 300,000 farms since 2002, and the average farm size has gotten smaller. The smaller farms are more diversified and they are producing more food per acre than the larger farms.



Lewisville, MN(Zone 4a)

They are calling a place like ours a farm. Only 11 acres. We produce a great amount of food, but most 5+ acre farms do not. The change of what they call a farm makes the huge increase. Here in southern MN, small farms are disappearing fast. When the small guys retire, their land is taken over by big farmers. Almost no dairy cows around here at all. 2 I know of are both in high numbers of cows. Hogs are 90% raised in large confinement buildings. Buildings are owned by a person, then leased to giant hog farms.

San Francisco Bay Ar, CA(Zone 9b)

I guess it depends on how you define the concept of "farm". Geography, climate and available natural resources will greatly affect possible size.
If someone earns their living producing agricultural products from their land, why would you not consider that a farm?

Lewisville, MN(Zone 4a)

Very few people earn their living from the farm. We make over half of our living from the cabinet shop. Most grain farmers around here either have an off the farm job, or their wife is working off the farm, or both. Many farmers own semi trucks & haul grain for other farmers or the co-ops.
It is not cut & dried the farm paying the way like it did in the 40's & 50's.

Sapello, NM(Zone 5b)

And with NAIS anyone that owns a livestock animal will have to register as a farm, whether much income is produced or not.

Panama, NY(Zone 5a)

We sell our milk to Dean Foods' Erie PA MeadowBrook milk plant as independent producers. This was in a recent edition of Hoard's Dairyman:

"Dean Foods posted its strongest quiarter in the company's history as a drop in costs helped double fourth quarter profit. Net income for the nations' largest dairy processor jumped to $66.4 million, or 42 cents a share. That compares to $32.6 million or 24 cents a share a year ago. The jump was fueled largely by a drop in costs for items such as raw milk, fuel, energy and resin for bottles."

We were paid a base price of $12.24 per hundred in February.

Poolville, TX

"...The jump was fueled largely by a drop in costs for items such as raw milk, fuel, energy and resin for bottles."

Raw milk got cheaper? Sure didn't get cheaper to make it!


I don't get it....

Panama, NY(Zone 5a)

Yeah, neither does anybody else.

Sapello, NM(Zone 5b)

Wait, don't tell me... executive bonuses got bigger, right?
{{hack, spit, scowl}} }=op

Jay

San Francisco Bay Ar, CA(Zone 9b)

Grrrrrrrrrrrrr!

Tamworth, NH(Zone 4b)

Interestingly, I have not seen the price of milk drop in the stores here. The store brand has been selling for 3.95/gallon in the store I shop at for at least the last 10 months. And the name brands are higher and their prices haven't dropped either.

There was a news report recently about how raw milk prices have dropped so much, that some 3rd and 4th generation dairy farmers in NH are wondering if they will just have to quit this year. But they don't know anything else. Imagine trying to decide what to do with the rest of your life, when your whole family for 100 years or more has been farming and that's all you want to do.

Poolville, TX

Milk (not organic) is $2.00 a gallon. Organic is $6.82 a gallon.

Tamworth, NH(Zone 4b)

Really! The lowest price I've seen for milk up here is somewhere around 2.60-2.80/gallon, at BJ's Wholesale. I don't know for organic because I don't pay attention to that. There was a guy locally that was advertising raw milk from his cows for $8/gal. I don't remember if he was organic or not.



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