Record Dairy Prices At $20 Per 100 Pounds
US - Dairymen are experiencing a rare event these days - the higher retail prices consumers are paying at the grocery store for milk is actually spilling over to those who produce the product.
17 September 2007
2 minute read
Prices are climbing at the retail level in part because there are fewer dairies throughout the nation and bigger demand for milk products throughout the world, said Ronnie Bardwell of the LSU Cooperative Extension Service.
“For the first time in history, I would say, they are getting over $20 per 100 pounds of milk,”
Ronnie Bardwell, county agent for the LSU Cooperative Extension Service.
Ironically, there are fewer dairies because farmers for years have been working at about a break-even or go-broke rate with production costs outstripping prices received for raw milk.
At last dairymen are getting record prices for their raw milk. But they are also paying at or near record prices for all the things it takes to make it happen.
“For the first time in history, I would say, they are getting over $20 per 100 pounds of milk,” said Ronnie Bardwell, county agent for the LSU Cooperative Extension Service. “When you look at the big picture, if you take out a year ago, they were probably still down to that $14 dollar milk. If you look at the last 20 years the average has been about $14 with some peaks and valleys.”
But it is costing about $18 to produce a hundred pounds of milk, thanks to the price of oil, feed, the cows themselves and equipment.
An example is the price of corn, a primary feed stock. It has roughly doubled in price since last year because of a federal subsidy to turn corn into ethanol, Bardwell said.
The national trend toward fewer dairies is evident in Louisiana and specifically Tangipahoa Parish, traditionally the biggest dairy-producing parish in the state.
In 1982, 330 dairies were in the parish and today there are about 90, Bardwell said.
Meanwhile demand for milk and milk products is growing throughout the nation and overseas.
“In the big picture you have China and India. They want milk. They've got people and they have to feed them so they are buying dry powder and other products,” Bardwell said. “So there's a little shortage of milk to go around in the United States and we are exporting it.”
Source: Hammond Daily Star
