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CWT Ends The Speculation

Published on: 17:42PM May 13, 2009

Fellow AgWeb blogger, and Dairy Today editor Jim Dickrell, recently posed the question of how many cows would CWT remove in its seventh herd retirement?  That question, which many others in both the dairy and beef cattle sectors also had been asking, was answered today.

 

103,000 cows.  Two billion pounds of milk.  388 farms.  A little more than 1% of the nation’s annual milk production.

 

But the real answer is not how many, but how does that number compare to people’s expectations.  Earlier this year, some speculated that the real figure needed to be 300,000, or even more.  That’s why some cattle producers got their knickers in a knot, even though CWT in its six-year history has taken out just 275,000 milk cows since 2003.

 

On the other hand, the 103k figure is 40,000 more than the previous largest-ever round, back in 2004.  It’s a big down payment on the reduction that needs to happen in the national dairy herd, and as the announcement makes clear, it’s just the beginning of a process of reducing the herd in 2009, not the culmination of CWT’s milk supply reduction efforts.

 

So reaction to this number is all about expectations.  Hopefully those who know the business the best recognize that this is a Goldilocks figure:  not too high, not too low, just the right temperature.

 

The important thing to remember about CWT is that for every dairy farmer whose bid was tentatively accepted on Wednesday, there are 150 others who will still be in the business of dairying, and hopefully their lot will be easier in 2009 as milk production slows and prices respond