Guebert is an agricultural columnist from Illinois.
Maybe this is what Willie and Waylon were thinking when they warned American “mommas” to not let their “babies grow up to be cowboys.”
Anyone with a dairy cow this year will lose, on average, $70 per month feeding and milking it, and more if the cow is also packing debt.
That means that in the Great White Washout of 2009, a moderately sized dairy farm – say a family operation with 200 cows – will lose nearly $170,000 making milk. If the family has a banker as a partner, as 70 percent of all U.S. dairy producers do, the family will likely lose $1,000 per cow, or $200,000, this year.
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The catastrophic losses mean people and cows are running, not walking, out of milking parlours nationwide.
Vermont, where cows are as hallowed as their owners’ flintiness, has already lost 40 of its 1,000 dairies with hundreds more at risk. Pennsylvania officials estimate the state will lose 25 percent of its 7,400 dairy farmers before prices turn.
All of this calamity comes just two short years after farm milk prices hit record highs of more than $21 per hundredweight. Today, prices are half that.
In fact, in July 14 testimony before the U.S. House of Representatives agriculture subcommittee on livestock, dairy and poultry, Jim Miller, under secretary of agriculture for the U.S. Department of Agriculture’s farm and foreign ag services division, estimated this year’s on-farm milk price will average just $12.15 per cwt., the “lowest annual price received by farmers for milk since 1979.”
Compare the price received for milk to the prices paid for making it. In his House testimony, Miller reported that feed costs in California, the nation’s largest milk producer, were $12.19 per cwt. in May. That makes dairying a less-than-zero profession.
More importantly, says dairy producer John Bunting, the folks exiting dairying because of today’s absurdly low prices are its younger, more-likely-to-be-indebted generation.
“In short, this nation currently seems to have public policy that favours dairy farmers over age 70 than those younger than 50,” he said from his New York dairy barn July 15.
“How do you think that’s going to work out in the coming years?”
It will be a disaster – “an absolute calamity,” is how Bunting describes it – for consumers, processors and farmers because today’s sustained crushing prices will force younger farmers and older bankers alike to leave dairying forever.
Miller, despite his bleak House testimony, believes milk prices will rebound to an average $15.60 in 2010.
In the meantime, he said USDA’s tools will hopefully give many farmers enough cash to make it through 2009’s train wreck. These tools include government purchases of butter, cheese, and non-fat dry milk to boost support prices and fatten food aid programs, and the Milk Income Loss Contract program, which will pay farmers an estimated $900 million this year.
Bunting, who maintains a lively blog at johnbuntingsjournal.blogspot.com/ and writes for The Milkweed, a Wisconsin-based monthly dairy newspaper, isn’t buying it. He says this crack-up’s swiftness and severity shows U.S. milk policy for what it is: totally inadequate and completely opaque.
“No one in Washington knows how milk is priced anymore or how easily those prices are manipulated by the very few, very big dairy co-ops and processors,” he says.
“And because they don’t know, they can’t fix it.”
Under the present policy, Bunting says, dairy farmers have only two avenues when low prices strike – leave dairying or get more cows. The former is usually unacceptable, the latter “certainly shortsighted.”
He’s right – dairy producers like him “got milk,” too much, in fact. What they have a shortage of, however, is leadership.
