Cows under new CWT herd retirement could head to market by mid-May

March 31, 2009 07:00 PM
 

Depending on the number of bids received and accepted, the latest herd retirement program from Cooperatives Working Together (CWT) could see cows begin moving to market by mid-May, officials said today.

 

Speaking to reporters during a conference call, Jerry Kozak, president and CEO of National Milk Producers Federation (NMPF), said CWT would continue removing cows through June and July with a likely wrap-up in August.

 

"The process will be prudent and judicious,” Kozak said.

 

Herd retirement bids will be accepted starting today and continue through May 1. CWT is managed by NMPF.

 

"There are some wild rumors out there about the number of cows CWT will remove, but there is no set goal in milk volume or cow numbers,” Kozak said.

 

CWT anticipates a large number of bids as dairies struggle with low milk prices and high production costs.  

 

"Producers should recognize the competitive nature of bidding,” said Kozak. "CWT won't pay more than cows are worth.

 

"CWT is a business, not a charity or bailout,” he added.

 

In a change to previous herd retirement rounds, the new program will allow CWT members whose bids were accepted in a previous round to participate again. This is a one-time exemption.

 

Producers whose bids are accepted will be paid in two installments. Once a successful bidder has met paperwork requirements, he or she will receive a payment of 90% of the bid amount multiplied by 12 months of the dairy's milk production. The remaining 10% plus interest will be paid a year later if the producer and his dairy don't engage in commercial milk production and marketing during that time.

 

This marks the seventh CWT herd retirement program since 2003. The program has "collectively removed 275,000 dairy animals” during that time, Kozak said.

 

When milk prices are high, it's more cost effective to use CWT's supply management efforts in an export program, Kozak said. When prices are low, herd retirement is more cost effective.

 

Learn more about the new herd retirement at www.cwt.coop

 

Catherine Merlo is Western editor for Dairy Today. You can reach her at cmerlo@farmjournal.com.

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