Dairy farmers are worried about losing their businesses and land if milk futures continue in a downward spiral throughout 2015. In some places in the United States, a gallon of milk can now reportedly be purchased for less than $3 per gallon.
Wisconsin-based Family First Dairy Cooperative Director Norbett Hardtke said that dairy farmers respond to global demand when working their cows. When demand is high, dairy farmers milk more from each cow and expend their herds when prices jump to record highs – resulting in an oversaturated market, according to Hardtke.
China has reportedly decreased milk imports from American farmers after spending many years creating a powdered milk stockpile. The change in purchasing habits came after Russian trade with the United States came to a grinding halt.
Grocery store shoppers are delighting in the low milk prices, but dairy farmers are reportedly being forced to tighten their belts.
“I guess I’m sorry if I’m hurting the farmer or the middleman, but I’m certainly delighted to pay under $3 per gallon,” Madison, Wisconsin, shopper Michel Kleinhenz told HTR News.
The cost of maintaining a herd increases during winter months, when hay bales and bags of feed must because grazing the livestock is not an option. While milk prices may be low now, the cost-per-gallon could ultimately increase substantially to make up for losses sustained when the milk market stabilizes. The savings accrued now could not only leave wallets lighter when purchasing milk, cheese, and other dairy products in the future, but could leave the country with fewer farmers attempting to feed the masses in coming years.
During the milk boom, many dairy farmers reportedly purchased not only more cows, but expensive new equipment in order to meet the demand. Every state in the republic reportedly has some type of dairy production. When farms do not make money, local economies can struggle from the loss of cash not only from those who work the land, but for workers in auxiliary businesses and through a decrease in funding for local essential agencies funded via tax levies.
“It’s something that no farmer likes to do [pouring milk down the drain] it doesn’t feel good to just dump it out,” New York-based Northeast Dairy Producers Association Board Director Jon Greenwood said.
What do you think about the milk bust and how it could impact the economy and the food supply in the future?