Are dairy farmers being conditioned to accept low milk prices?
A guest editorial by Arden Tewksbury.
I was astonished when I was informed that some national agriculture magazines and other Ag news outlets are basically saying, “Take your present milk prices and shut up!”
They are saying that $24 milk was once in a lifetime and don’t think it will happen again. They are also saying the so-called three year pricing cycle is done, so accept what you get!
Whoa! Let’s stop a second.
Yes, in 2014 the Federal Order #1 price was over $25. Three times and in September it was $26.16 per cwt. (hundred-weight). However, in August 2011 it came in at $23.22 per cwt. And in August 2007, the price was $23.14 per cwt.
But, of course one must remember many of the years that milk prices were half of these higher prices, such as 2009, 2003,2002, and the year of 2000 when order reform was put in place. However, many people just don’t seem to realize that dairy farmers do have a cost of operate their farms.
The worst thing for dairy farmers to have to combat with is the topsy-turvy milk pricing formula that dairy farmers have to live with. (Let’s never forget the unreliable weather systems.)
The second worse thing is the cost of production it takes to run a farm. While many dairy farmers take steps to control these costs, there are many costs that are not controllable. (The ill-fated margin insurance programs illustrate this in #2. However maybe number 3 is equally as important as number #1 and #2. )
God help the people that keep telling dairy farmers to produce more and more milk. Remember the ones that told you to produce more milk-more milk for the export markets. Please remember the politicians who advised the dairy farmers to produce more and more milk for all of the new yogurt plants. Look what happened. (Don’t forget the threat of $8 per gallon milk prices.)
What’s the answer to all of this malarkey?
Dairy farmers (and handlers and consumers) deserve a new pricing formula that will give dairy farmers a fighting chance to cover their cost. Equally important: a workable supply management program must be implemented to keep the supply of milk in line with the domestic market.
Pro-Ag can be reached at 570-833-5776.