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Dairy farmers hurt by low milk prices

August 08, 2009|By JENNIFER FITCH

WAYNESBORO, Pa. -- Dairy farmers these days are finding their cows are making a lot of milk, but not a lot of money.

They're receiving $12 to $13 for 100 pounds of milk, half of last year's rate. Industry insiders say the cause is simple -- too much supply, not enough demand.

The biggest factor in the "dairy crisis" is a dramatic decrease in exports to other countries, according to Mark O'Neill of the Pennsylvania Farm Bureau. Also, sales to restaurants dropped off 40 percent, he said.

O'Neill said various organizations are working with the government to fix the problem, but no ideas presented so far are a cure-all. The U.S. Department of Agriculture recently agreed to support prices with an additional $243 billion from August through October.

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"This is not a solution to the dairy crisis," O'Neill said. "It's not going to bring farmers out of debt, but it's a help."

Jessica Middour's family manages 150 Holstein cows on Tomstown Road. More and more money is being borrowed to buy necessities like corn seed.

"Our farm, in this family, was started in 1814. ... We don't know if we're going to make it to the 200-year mark," Middour said.

More farms might have been lost by now, but cows and land are not worth much right now at sale time, she said.

O'Neill said he didn't have statistics on how many farms might have closed.

On Wednesday, a program known as Cooperatives Working Together announced it obtained agreements to send 86,000 cows from 294 farms to slaughter in an attempt to diminish the supply.

To participate in Cooperatives Working Together, farmers must relinquish every cow they own.

"Quite frankly, dairy farmers are losing money day by day. They're operating on lines of credit right now," O'Neill said.

"We're losing money every day we do business," Middour said.

The government sets dairy prices and needs to establish a better minimum rate, she said.

"If they'd just pay us fairly, there wouldn't be the need for the (USDA's new) aid," Middour said.

Middour shared results of a questionnaire given to almost 100 dairy producers in July. In it, they were asked "If the price of milk you receive does not increase quickly, do you see yourself staying in the dairy business?"

Sixty-nine percent responded "no" or "maybe."

Joseph E. and Jessica Middour's farm produces 9,000 pounds of milk a day. For a gallon of milk sold for $2.99 retail, the Middours receive about 91 cents.

A good corn crop will help the Middours, although they cannot employ many people to help with the harvest this year. They're also hoping gas prices stay low.

O'Neill said price forecasts did little to prepare farmers for what has happened.

"Prices have stayed lower longer than anyone projected," he said.

Franklin County is the second biggest dairy-producing county in Pennsylvania. The county's largest industry is agriculture.

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