CWT Sets Record

David Sparks Ph.D.

 Cooperatives Working Together announced that it tentatively accepted 388 bids representing a little over  100,000 cows and more than 2 billion pounds of milk production capacity in a series of dairy herd retirements planned over the next 12 months. The CWT says these actions are a product of huge financial stress in the dairy industry. 88 bids were accepted from the West representing 38,498 cows and 761 million pounds of production. That means 79 percent of the cows removed from herds in this round come from the Southwest and the West.??Producers in the two regions had offered  over 130,000 cows which is about  82% of the cows offered from across the country.

 Bob Naerebout, Executive Director of the Idaho Dairyman’s Association gives an analysis which is not very encouraging. “This is the largest buyout that they have ever done and the turmoil the dairy industry is in right now is strictly a factor of supply and demand. Whether, as a dairy producer, you agree with this program or not, it is the only program that is addressing the supply side of the equation. Whether it will significantly raise the price of milk remains to be seen.”

 The average price for a gallon of milk at grocery stores last month is down just 19 percent from its peak of $3.83 in July. Farmers, on the other hand, got $1.04 a gallon in April - 35 percent less than they were paid last fall. This winter, wholesale prices were down as much as 45 percent.