Depressed milk prices force more farmers out of order
DES MOINES, Iowa (AP) – High production costs and falling commodity prices over the last four years are forcing more and more dairy farmers out of operation in Iowa and other dairy states, according to agribusiness experts and farm groups. [19659002] "We see a significant loss of dairy farms," said Larry Shover, president of the Iowa State Dairy Association Board. "They do not see a light at the end of the tunnel."
Iowa is the country's tenth largest dairy producer with 1,150 dairy farms, and it is lost about 80 dairy operations this year – almost 7 percent. Wisconsin Agricultural Statistics Service data show that the state had 8 304 licensed dairy herds in October ̵[ads1]1; 634 fewer than a year ago.
The global milk flood has depressed prices to about half of what they were in 2014, and they have still not hit All-time downs, The Des Moines Register reported. But US production has continued to increase despite the fact that the large number of dairy dogs are thrown out of herds, says analyst Mark Stephenson, University of Wisconsin-Madison.
"The disaster is that we still produce more milk month after month," Stephenson says, adding that the US will need to see a significant increase in exports for dramatic price improvement.
The proposed US-Mexico trade agreement Canada, which is expected to gain access to dairy products in Canada, is not expected to change it. Regional leaders are looking at the potential gains in the deal "as too small and too far in the future to help (US) milk farmers", the Federal Reserve said in Chicago recently.
Unfortunately, Stephenson said that the loss of dairy farms should help pull the dairy supply in line with demand. "But I do not see it yet," he said.
A federal program could provide some help to bend dairy farmers .
The US Department of Agriculture's Dairy Revenue Protection is designed to hedge against unexpected decline in quarterly revenue from the sale of milk. The dairy milk production is indexed to st the ate or region where the dairy producer is located.
The program is modeled on federal breeding insurance programs for maize, soybeans and other goods
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Information from: Des Moines Register, http://www.desmoinesregister.com
