High Costs Force Small Dairies Out Of Business

US - A new federal analysis shows basic economics - the simple balance of profit and loss - are driving small dairies out of business in California and the rest of the nation, leaving fewer, but increasingly larger, dairies.
calendar icon 25 September 2007
clock icon 1 minute read
Walt Kessler runs a small dairy of Guermsey cows on the north side of Galt. Costs have forced many small dairies out of business.

And while environmentalists decry the impact of farms whose herds number in the thousands, ironically it is the large-scale operations that can best bear the costs of more-stringent air and water pollution restrictions now being imposed.

One Lodi diary farmer, Hank Van Exel, increased his operation by buying out another farmer a few years ago and now oversees the handling of 1,600 cows, even if that's not his first choice.

"I'd love to have just my very best cows, and have 400 cows and make a nice living; that would be a wonderful thing," he said.

But the increasing price of fixed expenses - such as $200,000 feed trucks, $100,000 tractors and million-dollar milking parlors - can best be supported by larger and larger operations.

"What you can do to maximize your efficiencies over those fixed costs (is) basically ... getting more cows into a facility," Van Exel said.

Source: recordnet.com

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