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Dairy Industry Feeling Economic Squeeze

31 December 2008

WISCONSIN - Prices that farmers receive for dairy products have plummeted in recent months and are likely to fall further in early 2009.

Milk prices at the farm gate have fallen to $15 per hundred pounds, down about 30% from last summer. Even worse for farmers, the Class III milk price could dip below $13 January through April, according to industry experts, reports Journal Sentinel of Milwaukee.

"This level of milk prices will cause major financial stress in the dairy industry," Robert Cropp, professor emeritus at the University of Wisconsin-Madison, wrote in a dairy industry outlook report.

"There is concern that the troubled economy will continue to negatively impact sales of milk and dairy products," he added.

Dairy farming contributes roughly $20.6 billion a year to the state's economy and employs 160,000 people, according to industry figures. The economic impact of dairy farming here is more than twice as large as the citrus industry's impact on Florida.

Earlier this year, dairy farming was booming. Much of the production was driven by high milk and cheese prices, which encouraged farmers to increase herd size.



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