Dairies propose state hike milk's base price

By Carol Reiter
creiter@mercedsun-star.com

E-Mail

Comments (0)

Text Size:

tool goes here

Dairy farmers hit by low milk prices and high feed costs are asking California for help.

Western United Dairymen and the Alliance of Western Milk Producers asked California Agriculture Secretary A.G. Kawamura to raise the minimum price paid to dairy farmers for the milk they produce.

"We are seeking 50 cents per hundredweight of milk," said Michael Marsh, chief executive officer of Western United Dairymen. "That's in addition to the regular pricing for the next six months."

A hundredweight is 100 pounds of milk.

The 50 cents would be permanent for Class 1, or liquid milk, the commodity that gets the highest price for producers.

Marsh said he's also asking for a permanent increase of 26 cents a hundredweight for Class II and Class III, which includes ice cream, cottage cheese and other milk products. The 26 cents would bring the price producers earn back to what it was on Jan. 1 of this year.

"The dairy farmers have such a hole in their checkbooks after this economic downturn that we want to try to get them help as quickly as we can," Marsh said.

Dealing with a glut

Bill Van Dam, chief executive of the Alliance of Western Milk Producers, said a perfect storm of damaging events hit producers this year, including high feed prices and a glut of milk at processing plants.

"We had plants that couldn't take any more milk at all," Van Dam said. "We had producers who had no place that would take their milk."

Although the national economy has started to improve, dairy farmers still face tough times. Marsh said California had about 1,750 commercial dairy operations at the beginning of the year, but more than 150 of those farms had stopped operating by October.

Many of California's dairy cows were sent to slaughter through a buyout program this year, Marsh said.

"We reduced the state's dairy herd by about 300,000 cows," Marsh said. Dairy farmers who sold cows through the buyout must stay out of the business for at least a year, he added.

Some feed costs drop

Dairies can finally see some encouraging signs with the price of hay and corn dropping, but other feed has jumped in price.

"We've had a little temporary relief because of feed costs," Marsh said. "Hay and corn have come down, but other proteins like soybeans and cottonseed are still high."

Van Dam and Marsh said the market for milk has improved, but dairy farmers are still playing catch-up, after losing money for almost a year. A dairy that milks about 1,000 cows lost about $100,000 a month this summer. Some dairies couldn't stick it out, and families that had been operating for generations had to sell their land and cattle to pay off loans.

A public hearing is scheduled Nov. 9 at the California Department of Food and Agriculture in Sacramento to consider possible milk price increases.

Van Dam said he hopes the higher price schedule will go into effect on Jan. 1.

"We've had bad periods before," he said. "In the past, dairymen lost $1 to $2 per hundredweight. Now they're losing $5 to $8. It has to stop somewhere."