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On the Udder Hand

RSS By: Chris Galen, AgWeb.com

Chris Galen is the Senior Vice President of Communications for the National Milk Producers Federation .

No Fooling

Apr 01, 2009

If you’ve read any news lately, (or here, or here), you know that dairy farmers are facing a winter of great discontent.  Prices are very low, and with input costs still high, the cost of milk production is at one of the lowest points in history.  All the 1930s-era comparisons when talking about today’s economy are certainly true for dairy farmers right now.

 

That’s why Cooperatives Working Together announced Wednesday the latest in its series of herd retirement programs.  Some may have  thought it was an April Fool’s prank, but given where the economics of dairying are right now, the situation is in fact very serious.

 

This is the second bit of good news farmers have received in the past week.  Last Thursday, Agriculture Secretary Tom Vilsack announced that USDA was going to use 200 million pounds of surplus nonfat dry milk in domestic feeding programs.  The main benefit of that decision was to keep the powder from being resold to the commercial market by USDA, which could have retarded the rebound in farm-level milk prices.  The other good news about the announcement was, frankly, just the fact that USDA recognized the gravity of the dairy problem, and did something about it.

 

And that’s basically what CWT’s announcement means today:  it’s a sign of spring blooming, not April fooling.  The futures markets are pricing in stronger milk prices in the last 4-5 months of the year.  CWT will help farmers get there.

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COMMENTS (31 Comments)

Anonymous
vilsack is a joke he needs to quite and get out while he can still walk we need someone that wants dairy farmers in the us and he is not one of them
3:34 PM Jun 18th
 
Anonymous
Demand isn't near as bad as people keep saying. Yes, exports have dropped - but they dropped from record highs - they are still okay when compared to years other than 2007/2008. Domestic demand is weaker than usual but its still decent. I'm not sure what CWT is doing exactly - wish i could pick their brain - but they went after a two year contract with co-ops for a reason- I think to secure funding - so that if need be, they could get loans to boost their funding for a large herd retirement. I wonder just how many cows are going. I think they could maybe remove 75 to 100,000 without loans. I'm not sure we need to remove as many cows as thought because production per cow is slipping especially in California. Economists predict that there will be 9 million or less cows, right now were at 9.287 million cows.
5:11 PM Apr 20th
 

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