Monday, September 28, 2009

Herd retirement program seeks to increase milk prices by decreasing the number of cows

A three-phase herd retirement program moved 225,783 cows and 4.5 billion pounds of milk from the market this year in an effort to improve chronically low milk prices paid to farmers. About 70 percent of dairy farmers nationwide participated in the Cooperatives Working Together retirement this year, Monte Whaley of The Denver Post reports. For some participants the program offered a financially viable chance to get out of the business for good. (Post photo by Hyoung Chang)

"Sure, it's a good way to get out of the business, but the ones who want to stay in, they get the overall benefit," CWT spokesman Christopher Galen told Whaley. "They will get slightly higher milk prices than they would have if the program wasn't here." Farmers submit a bid on the number of cows they want to retire and are paid based on the previous year's production of the cows and market value for slaughter. The program says dairy prices should increase by 66 percent per 100 pounds of milk, Dr. Scott Brown of the University of Missouri's College of Agriculture, Food and Natural Resources told Whaley.

Others say that the program, even combined with other price supports, still can't sustain the dairy industry long term. Bill Wales, head of the department of animal sciences at Colorado State University tells Whaley that the program will only work if all dairy farmers participate. Farmers like the Bernhardt family, who have been farming in northern Colorado since 1920, saw the program as an opportunity to recoup some losses and wait for the market to stabilize. The Barnhardts, who have a year to decide if they're leaving the business for good, tell Whaley that their cows brought double what they would have sold for at market. (Read more)

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