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WASHINGTON (AP) – A dairy trade group is expanding a program that pays farmers to reduce the size of their herds in an effort to keep milk prices up.

The National Milk Producers Federation will pay farmers to send nearly 52,000 cows to slaughter over the next few months. That will remove 931 million pounds of milk, or 0.55 percent, from the nation’s supply, the federation says.

This is the second year that the group is paying farmers to reduce the amount of milk on the market. In the program’s first year, 35,000 cows were slaughtered, removing 600 million pounds of milk.

The effort was one of several factors that helped push milk prices to record highs this year, following 25-year lows the previous year. Other factors included lower production of Monsanto’s growth hormone and the banning of livestock from Canada after a case of mad cow disease was discovered there last year.

The price of milk that is used to make cheese peaked at $20.58 per hundred pounds this year, more than twice what it was a year earlier.

Milk prices have leveled off in recent months, but are still high by historical standards, just under $15 last month. But the federation wants to avoid repeats of previous boom-and-bust cycles, when good prices led to more production, which would then send prices down.

“With sustained high prices, there will be strong incentives to expand milk production,” said Ed Jesse, a dairy economist at the University of Wisconsin-Madison.

Chris Galen, the federation’s vice president of communications, said the program was popular among farmers. Participants pay a 5-cent assessment on every 100 pounds of milk produced to fund the program. Farmers representing 70 percent of the U.S. milk supply participated, Galen said.

Greg Jans, a dairy farmer in Grove City, Minn., about 90 miles west of Minneapolis, said he sold 100 of his 320 cows for slaughter in the program’s first year. He received about $80,000 from the dairy group in exchange for reducing his herd size. He used the money to upgrade his farm operations.

Jans said he was not concerned that higher milk prices would drive away customers.

“I don’t think that will ever happen,” Jans said. “We’ll never get to a point where our product gets too expensive.”

The average national retail price per gallon in October, the most recent month available, was $3.16, compared with a high of $3.57 in June.

Garry Crosby, who has 90 cows on a dairy farm in Shell Lake in northwest Wisconsin, paid into the program but did not sell any of his cows.

“Whether you sell cows or are chipping in for somebody else to sell his cows, everybody is participating,” said Crosby, who says he paid about $900 in fees to support the program.

“It’s farmers coming together to address the real issue, which is price. You can’t survive without it.”

He said he got at least a 10-fold return on his investment as a result of higher milk prices.

Some consumer and animal welfare groups are critical of the program.

“The way they’re doing this, it might keep prices a little higher over a longer period of time,” said Chris Waldrop, health and safety associate at the Consumers Federation of America. “And of course that hurts consumers when they’re trying to buy dairy products.”

Tamiko Thomas, an animal scientist at the Humane Society of the United States, said the agriculture industry “has had a long-standing attitude of efficiency above all else. Animals are being discarded when they don’t fit the market scheme.”

Galen disagreed.

“The animals aren’t expendable; they’re going into the food supply,” he said. “And they will be used to contribute to the meat supply.”

Galen also contended that farm prices are not always directly linked to what consumer pay at the supermarket.


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