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Monday, February 09, 2009

Falling milk prices force many dairy farms to quit

Dairy farmers are bracing for the year ahead, since milk prices have dropped to their lowest since June 2006. Debra Groom reports for The Post-Standard in Syracuse, N.Y., that projected prices for milk in January and February are under $12 CWT (a hundred pounds of milk, or 11.6 gallons), nearly half the price from a year ago.

The cost fluctuations force many dairy farms to go out of business since the price they receive for their milk is "set each month based on a formula beginning with cheese prices from the Chicago Mercantile Exchange," Groom explains. Tim Halsey, a former dairy farmer in Mexico, tells Groom, "You need to make about $18 a hundred just to cover the cost of production." In New York alone, the 2007 Census of Agriculture showed five counties lost 151 dairy farms between 2002 and 2007. The downturn in the world economy is another factor resulting in less dairy demand. Read more.

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