Crisis has hit the dairy industry and hit it hard. While small dairies, like the majority of those found in Wisconsin, are most vulnerable to fluctuations in the market, the dairy crisis is being felt across the nation, in every region and on every farm. You are right to think that such a collapse in the industry would at least translate into lower consumer costs at the supermarket. Yet, as you've noticed, milk prices have hardly begun to budge.
The simple story behind the dairy crisis is that the industry is drowning in milk, the result of a catastrophic convergence of factors beyond farmer control. The global economic downturn has significantly soured demand for milk and milk products; farmers are struggling to pay bills from record high feed and fuel costs this past summer; adequate credit is increasingly impossible to come by; and, to top things off, the price of milk paid to farmers by processors collapsed a record 30% in January alone, and 50% since July. With little relief in sight, the price of milk is projected to continue this decline throughout 2009 before making even a slight recovery.
To pull this into perspective: a hundred weight (cwt) of fluid milk, about 11.8 gallons, is currently selling for as low as $9, but just to break even a dairy farmer needs to make at least $20-25. Read the entire article here>>>
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