Dairy dilemma: Farmers lament low prices for milk

US - Two weeks ago, dairy farmer Ronnie Gribble sold his Somerset County farm – and his 200 cows with it – to a man in Franklin County.
calendar icon 11 December 2006
clock icon 1 minute read

Gribble, 59, said he is fed up with wholesale milk prices, which now average $12.90 per hundredweight. That’s little more than they were in 1979, when gasoline and tractors were at one-third of today’s prices.

“It’s terrible, it’s just terrible,” said Gribble, whose farm was on Chickentown Road in Milford Township. “Are you working for the same wage you did in 1979?” The pricing system was developed in the 1930s when 70 percent of dairy product went into bottles. It now needs changing, some say. Today, .40 percent of milk produced is sold in bottles, while cheese consumption is much higher.

An emergency hearing requested by the National Milk Producers Federation will be held Monday in Pittsburgh. A number of calculations determine the price farmers receive for milk, be it: Class I – in the bottle; class II – sour cream; class III – cheese; class IV – powdered milk and butter. The U.S. Department of Agriculture will be asked to consider new pricing formulas for class I and class II milk and dairy product prices.

It all starts with the Chicago Mercantile Exchange and the price of cheddar cheese at manufacturers in the dairy rich states of Minnesota and Wisconsin. Supply and demand of dairy products comes into play, and a number of price differentials are added in.

Source: The Tribune-Democrat

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