Big Drop in Milk Price

The MILC program is based on prices at Boston. If the price drops below 13 something a cwt producers get 45% of the difference I think, been a while since I looked at it, didn't have MILC when we farmed.
Payment stops at around 2 and half million pounds. Small guys will get the full benefit of any MILC payments larger guys will lose out after they use up the quota.

20 dollar milk made a lot of guys giddy around here. Hopefully they will have enough equity left and an understanding banker to help them through.

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how about health care? its not the consumer, but insurance companies tell doctors and hospitals what they will pay, and for what.....insurance companies pay pennies on the dollar for services....while posting billion dollar profits.......

Farmers here in Wisconsin were getting 10 a hundred in the 1970s. I can't believe how little farming pays now days. I would like to start a dairy farm myself but the milk prices just aren't there to support it.

This is correct, but in the last farm bill, they added extra payments based on the cost of feed at the time that the MILC payments kick in.

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We have home delivery of milk in glass bottles from Oberweis. I love their milk, and the fact that it shows up every Friday morning. And our price per gallon has dropped by almost a dollar since I started taking their delivery in September. It's still pricey, but it's yummy good stuff.

Maybe this is one more "good for America" sign. The closer we get to absolutely ridiculous and crazy, perhaps the better. People may actually say enough is enough when we get to >$10 milk which is super-conditioned with hormones and chemicals. Perhaps this is the start of people willing to bring back the local farmer producing local products, irrelevant of government intervention.... Maybe wishful thinkin, but dang would it be nice....

Problem is there are no small local producers in many areas anymore.
10 dollar milk will make even less of them.

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I am fortunate in that there is an existing local co-op of dairy farmers locally who produce a good product at a reasonable price raised without hormone -I can even get cream which has nothing in it but cream.

This is why I buy from Oberweis:

From their website:
The richest, freshest milk you can buy. Supplied by our local family farmers who have pledged to treat their cows with respect but not artificial bovine growth hormones. Antibiotic-Free. In 1/2 gallon glass bottles.

I struggled with paying almost $7 per gallon at first, but the quality and convenience has sold me on it... not to mention that I'm glad to know I'm no longer giving my daughter milk from cows pumped full of antibiotics and growth hormones.

When milk was climbing towards 20 I had a buddy that took out a loan and bought 20 head. Rented a barn with a pipeline, silos with unloaders, barn cleaner, and was going to make money.
He penciled at 13 and figured he could do it. Now he's got his cows in his brothers place milking with floor buckets, pitching silage by hand and shoveling out the gutter and not making anything at all.

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Wow they really like that scare tactic about hormones and antibiotics.
The regular milk you buy in the store has been tested so many times it's not funny. There are no antibiotics in any store bought milk. They say their milk is antibiotic free, but that means nothing, they can treat their cows all they want as long as withholding times are followed.
There are just as many hormones in your 7 dollar a gallon milk as there are in any gallon bought at any store. Milk from animals treated with Prosilac is scientifically indistinguishable from milk produced by cows that are not treated. The Bovine Growth Hormone is present in similar numbers either way.
It's nice you buy local, but really...7 bucks a gallon?

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Have you gone to the plant or checked it out yourself? Almost every processor gets a pledge like that of some sort. It's mostly for the mental image like th pictures of cows grazing in a beautiful field, many dairy cows don't get much "field time". $7 a gal sounds insane but that's me. It is funny though how we used to get home delivered milk 3 times a week in qt. glass bottles for less then a quarter a quart. We weren't trendy or buying natural. That's just the way we bought milk, everyone did.

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3 times the price of store bought milk. No Way I am going to pay that much just so that somebody can say it is free from whatever.

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Okay, I continue to get more confused. Processors are said to be ripping us off, yet when I asked why farmers don’t become processors, the answer is it takes too much capital and effort. So sounds like processors should be rewarded for what they’re doing if it is so difficult. When milk is $20 are the processors getting ripped off?

How can farmers not have the time or money for marketing? Isn’t that an essential part of business? When farmers “pencil”, they just count on somebody else to do their marketing and determine their price? Apparently the answer to RandB’s question as to who is setting prices, is the government. Surprise, surprise, things are messed up. If farmers are an “independent lot”, you’d think they’d make their own way rather than relying on central planners.

Beeman, you mentioned cows not in pastures. If I was marketing, I’d promote how my cows were treated vs. the competition, and invite the public out to see them. Yes, production would have to decline, but you could explain that also, and hopefully get a higher price. I’m reading the average dairy cow doesn’t get past age 5 due to high production and the high grain diets. Ketosis, acidosis, laminitis(lameness), infertility, mastitis, injured udders, etc.

I’m more concerned about cow treatment than any hormones or antibiotics. Heck, I went to an “organic” dairy near here and saw the cows at their feeder standing in a manure slurry a foot deep. How dairies stay in business the way they appear is beyond me, except the average guy never sees one.

I saw a show where a farmer grew tired of low prices and started bottling his own and started giving tours of his farm. Got more money and more satisfaction.

Here's an example of what happened in New Zealand when they decided to end their subsidies.

http://www.hillsdale.edu/news/imprim...=2004&month=04

It's down to about $6 per gallon now.... It's been a while since I saw $2 milk around here.

No, I haven't checked their plant. Some may not trust their claim. Your choice.

I understand how the dairy farms operate- no, they're not free-range cattle.

In fact, I'd recommend that anyone who is in the area and interested check out a tour of the Fair Oaks Farms in northern Indiana. It's a little "cheesy" but you do get to see the workings of a mega-dairy farm. The milking merry-go-round and everything.

I also like the fact that it's in reusable glass bottles. I'm personally trying to generate less plastic waste in my life.

It's worth $6 a gallon to me. Maybe it wouldn't be worth it to others, and that's OK. It's the beauty of a free market economy.

I grew up on a WI dairy farm. Tough life for almost no return. The recent run-up in milk prices was another bubble created by the false economy.

Price supports were instituted in 1948 "to ensure a consistent and quality" supply of milk to market. A bit of socialism.

But if you figure that it takes 2 years from the birth of a heifer to milk producing, it is a bit of a pickle. And the breeding stock must come from somewhere. So what we have is an oscillating market where milk goes up due to shortage, people jump in, then the price drops as supply exceeds demand, then people go out of business.

The monster dairies only happened because of the price support subsidies. And, like the article from New Zealand, they will be the first to fold. The family farmer is vested and can usually ride out the storm.

Dairy farming is a tough life. You and your family are married to the herd. 365 days per year, 2 to 3 times per day, feeding and milking. There are crops to plant and harvest, pastures to maintain, fences to fix, equipment to repair and maintain. Luckily we could fix stuff and had very old and, to my thinking today, very inexpensive equipment. Most was horse drawn converted to a tractor.

What I learned at farm management school was bigger meant better and more efficiency. Does it seem ironic that the family farmer (and corporate dudes) fell into the same trap as the consumer? The debt trap. I believe that we survived only because we had low overhead and enough unpaid hands to make it work.

It also depends on which area you are living in as to what the milk goes into. Is it kept liquid? Is it made into Ice cream? Or is most of the "liquid" milk used to make Cheese?
In WI. most of the "Liquid Milk" goes to make cheese.
In AZ. most of their Liquid Milk goes To make Liquid Milk~!
CA. I am not sure but CA. is the biggest producer of milk.
I know Maricopa County in AZ. that is the county that Phoenix is in, a few years ago was 8th in the USA for producing milk~! And that is smack dub in the middle of the desert~!
Some of those huge dairies have 4,000, 5,000, 6K and more and that goes for CA also.
Several years ago I lived in the Phoenix Metro area and bought a LOT of milk to drink is was WAY Cheaper then soda~! I never ever paid over $1.50 a gallon, and sometimes short dated gallons were 99 cents a gallon~!
I come back here to WI. and milk was over 2 bucks a gallon the Dairy State ya right~!
CA might as well be called that now~!

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We belonged to a co-op. We sold high butterfat milk (Jerseys). It went to butter and cheese.

Processing milk cannot be that expensive nor complicated. It wasn't very long ago that most local areas had more then one processor. Somewhere along the line the farmer and the consumer bought into the bigger is better centralized processing BS. Probably due to the state ag system being tied to the state college being funded by big business thinking.

Some of the marketing like the happy cows marketing is a good feel good marketing strategy. If most people saw where a chicken lays an egg from they would never eat eggs.

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