Global milk glut squeezes dairy farmers, consumers

[brentspeak]

Source: Associated Press

By CHRISTOPHER LEONARD, AP Business Writer Christopher Leonard, Ap Business Writer – Mon May 25, 2:34 pm ET

BARNHART, Mo. – A collapse in milk prices has wiped away the profits of dairy farmers, driving many out of business while forcing others to slaughter their herds or dump milk on the ground in protest. But nine months after prices began tumbling on the farm, consumers aren't seeing the full benefits of the crash at the checkout counter.

The average price for a gallon of milk at grocery stores last month is down just 19 percent from its peak of $3.83 in July. Farmers, on the other hand, got $1.04 a gallon in April — 35 percent less than they were paid last fall. This winter, wholesale prices were down as much as 45 percent.

(snip)

U.S. Secretary of Agriculture Tom Vilsack also said he is not eager to remake the USDA milk pricing program. Instead, he wants to see if a range of recent actions might buoy wholesale prices. USDA recently donated 500,000 pounds of excess powdered milk to needy countries to reduce U.S. supplies, and a new program will pay farmers to slaughter more than 100,000 dairy cows.

Some farmers say faster action is needed. They're dumping their milk on the ground to draw attention to the crisis.

Read more: http://news.yahoo.com/s/ap/20090525/ap_on_bi_ge/dairy_squeeze

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Thanks for nothing, Vilsack. Not like there's anything urgent at stake here

[imdjh]

1. Who drinks milk? Now CHEESE, that's another matter.

Maybe American dairy farmers should get creative and start making discount American versions of cheeses I love but can't/won't buy: Stilton, Gorgonzola, Fontina.

[Tabasco_Dave]

3. My uncle started a brie factory but he didn't make it

there's too much competition from foreign companies and people who like that kind of cheese, want the "real thing". Btw it was really good brie.

[Toucano]

4. They snubbed California vineyards once upon a time

Now California wines are highly respected and well consumed all over the world.

Maybe cheese producers could get there one day, too.

[cali]

7. my neighbors

produce a fantastic mold ripened soft cheese, a fabulous blue and are doing very well indeed.

The Cellars at Jasper Hill Farm
June 2008
For more on the cellars at Jasper Hill Farm, view our slideshow.



We arrived at Jasper Hill Farm on a rainy Friday morning after navigating the scenic but rugged roads of Vermont's Northeast Kingdom. Jasper Hill, which is run by brothers Mateo and Andy Kehler, keeps about 46 Ayrshire cows, whose milk is used to produce popular cheeses such as Constant Bliss and Bayley Hazen Blue. Around the time we stopped by, the cows were making their seasonal dietary transition from hay—their wintertime meal—to about 300 acres of lush green pasture. This new diet will be reflected in both the flavor of the milk and, ultimately, the cheese.


The real story that morning was Jasper Hill's newest and most ambitious project—a 22,000 square foot cellar that has been built into the hillside across from their barn. This cellar, which features seven individual caves radiating outward from a central hub, is essentially Jasper Hill's gift to the Vermont cheese industry. The farm intends to age and distribute cheeses from around the state in an effort to give a leg up to smaller farms that may have trouble shipping their cheeses across the country.


Before we could enter the cellars, we had to put on hairnets and take off our shoes. While the caves are alive with certain kinds of molds that are beneficial to the cheeses, they want to be sure to keep out any unwanted bacteria or mold that might come in from the farm. Jen, who works at Jasper Hill, showed us around the individual caves, some of which were already stocked with wheels of Cabot Clothbound Cheddar, the award-winning cheese that Jasper Hill produces in conjunction with Vermont's Cabot Creamery. The cheese is styled after the British bandage wrapped or clothbound cheddars such as Keen's or Montgomery's. These wheels age for 10 months at which time they are sent to retailers and distributors around the country.


<snip>

http://www.formaggiokitchen.com/node/343

[Tabasco_Dave]

11. Well my uncle started the factory in the mid 1970's

i guess he was too far ahead of his time lol.

[cali]

12. he was way ahead of his time.

and way ahead of the American palate as well, but he was right.

[cali]

5. that's exactly what's happening in a big way in Vermont- except

the cheeses produced are boutique cheeses- often exquisite- and quite expensive. Nor are they always clones of European cheeses. There are dozens of small artisan cheesemakers in Vermont, and their products are consistently hailed and served in fine restaurants and sold in cheese shops, across the country.

http://www.vtcheese.com/temp/types.htm

[depakid]

2. As a reasonable person- I'd like to see some proof or analysis of the following statement

rather than just STENOGRAPHY:

"Milk processors and supermarkets see it differently.

Last fall and summer, they swallowed losses because of high wholesale milk prices and government-mandated ceilings on what they can charge. They're now recouping some of what they lost and anticipating a rise in prices this winter, said Mike Nosewicz, vice president of dairy operations at Cincinnati-based Kroger Co., which operates its own dairy processing division and sells milk through 2,400 supermarkets."

Lazy journalism- or fear of offending advertisers if you ask me.

[destes]

9. It's not just lazy journalism.......

Too many "news" people simply know nothing about agriculture. It doesn't take a genius to figure that fewer cows equals less dairy products and more expensive dairy products. When it comes to unit prices for the commodities, the producer(farmer) NEVER gets the same percent of increase as the retailer when prices go up and ALWAYS gets the biggest decrease of the two when there is a downturn. It's the same with corn, wheat, soy beans, beef, cotton or pork.

By far, MOST of the nation's agricultural acres are dedicated to one of those crops. Farmers are quitting and the land is used by corporate farms. This trend, which dramatically accelerated during Reagan/Bush, is a fundamental national security issue. But from the news, one would presume that the profitability of grocery chains was the main concern.

"Journalists" do us no service when they fail to explain the complexities. They do an active dis-service when they bandy terms like "government-mandated ceilings" or government price supports" without definition.

[Dappleganger]

6. Are there any local dairies anymore?

Decades ago I used to visit with a friend while he did his milk route in Virginia Beach, but I don't know if they're in business any longer.
Why don't farmers go back to having niche markets, switch over to healthier (non-hormone and organic) dairy practices and go back to the ways of the old days when people knew which farm the milk came from?

[cali]

8. They are going back to (and forward to) niche markets in many

places.

[RebelOne]

10. By slaughtering their herds and dumping the milk

on the ground is just cutting off their noses to spite their faces.

[rucognizant]

16. It worked for the Germans........

2 years ago the German Dairy Farmers were dumping their milk in protest. They won their case and got their concessions!

1991- I move to Maine just as the last dairy in Hancock Co was closing it's doors.

1998- Monsanto sues OAkhurst Dairies in SOuthern Maine preventing them from labeling/advertising their milk as BGH FREE. ( it IS WE KNOW IT and buy it anyway)
2003- SOn kills Mother, ( stepmother?) for her intention to sell their Dairy Farm, after the death of his Father. He wants to run it. Follow up ? will look into it.

2004- Towtruck driver taking my car to the garage, told the tragic tale of his Father losing his dairy farm and committing suicide. Son now makes a living in a fume breathing gas powered vehicle..............

2005-Dairy farmer ( in his 70's) down the road from my Daughter, gave his fields to the land trust ( NY). 8 years ago, when I was down there buying milk FRESH from the cow, his son waxed poetic about following in his Father's footsteps...........
He changed his mind!

2009- local supermarket,Independent, but supplied by an International chain based in Belgium, now offers raw milk,
produced on a farm 2 hours from us......$6.00 per gallon, $3.50 per 1/2 gal. WE"RE BUYING! Even tho the average income here is $20,000.
More drama around dairy farms than you would imagine!

[Justice]

13. here is what I know about the dairy business and retail sales

Think about it - where is the milk in the supermarket, the convenience store? In the back corner. That is because you go there to buy milk - and they make you walk by all of the other items in the store to get to it - hoping you will buy something else.

Milk is never on sale at the supermarket. That is because you cannot stock up on milk - you have to buy it week to week. If the retailer pays less for milk, there is no incentive to drop the price - you still have to buy it. The retailer will drop the price of paper towels or toilet paper or some other nonperishable item you can buy at costco or sam's club. But not milk.

Dairy farmers are not subsidized. The processors charge more to retail, but don't pay more to farmers. Family farms go out of business every day. There are more and more giant agri-farms (makes me shudder thinking of how the swine flu supposedly started on a giant agri-farm in Mexico).

[Tansy_Gold]

15. Milk is very much on sale, often as a "loss-leader" to get you to walk

through the store. Or at least it is here in Arizona. Fry's -- the local Kroger division -- often has half gallons 10 for $10, or $1/half gallon. No requirement to buy 10. I've often bought a full gallon on sale at $1.88, even though I can't possibly use that much, because the half gallon is more expensive. The other chains are the same way: Safeway, Albertson's, Basha's.

One of the things about dairy farming is that in order for the cow to lactate, she has to "freshen," or bear a calf, every year. That's why the herd reduction slaughter of the 1980s didn't work to drive milk prices up: the cows were slaughtered, but the remaining ones kept reproducing, and within a couple of years there were just as many cows as before.

Roughly half the calves, of course, are bull calves, usually castrated and turned into steers for beef production while the heifer calves go on to be bred and produce milk. Most cows are artificially inseminated, so there's no need for a whole lot of entire bulls. Just a few can service a whole herd of cows.

And that's something almost no one talks about -- the lack of biodiversity in the dairy industry.

Tansy Gold

[rucognizant]

17. O T

Sotomayer is Obama's pick!

[No Elephants]

14. Seem nothing is truly based upon supply and demand anymore. And no one seems to think that he,

she or it should ever have to tighten a belt during bad times.

[DLnyc]

18. that's the effect of monopoly control.

When a few large players control a market, they set prices by unstated agreement. In fact, when demand goes down their prices often go up, to keep paying dividends so they can dump their stock before their company goes bust.