CONTINUING COVERAGE: FLOODS OF 2016

Dairy Price Problem Forcing Farmers Out

The U.S. Dairy industry is struggling; since last year, dairy prices have gone down about 35 percent.
The USDA announced this week it would help out farmers by buying 11 million pounds of cheese out of private inventories.
The cheese will be donated to food banks and pantries across the U.S.
Secretary Tom Vilsack says he did the best he could with budget constraints, "They've been able to establish that the amount of cheese that we currently have in stock is the highest level of surplus we've had in cheese in 30 years. So it stands to reason that we're looking at prices that need a little help. And it stands to reason that we need to provide some help and assistance."
Vilsack also announced the Margin Protection Program for Dairy signup deadline is extended.
Iowa dairy farmer and President of the Iowa State Dairy Association Larry Shover says that will help out as much as the cheese purchase.
He says the big reason for the price declines is China got out of the market and the U.S. sanctions on Russia.
In Iowa, there are about 210,000 milk cows. Shover says Iowa will probably produce five million pounds of milk this year, that's about 580,000 gallons of milk. Adding the lower prices means dairy farmers will lose about $250 million.
On his farm it's worse than the nation's average. In October of 2014, he got about $2.23 cents a gallon, by May of this year, it was a $1.17 a gallon.
He says, "So you can imagine what that does to the bottom lines in the profit scenario, trying to pay the bills on these family dairy farms in Iowa."
In 2015, there were 1,330 dairy farms in Iowa. This year, there's 1,268. Shover says Iowa averages losing about 50 to 100 farms a year.
A problem in the state is there's a shortage of processors to boost the prices.
Stover says prices need to be boosted, "If we don't raise this price we are losing dairy farms. We're losing them even if we had the higher prices. as people get older the younger generation just isn't there to take over."
Shover says the biggest thing to boost the Iowa dairy industry would be to buy more milk products.