March 15, 2005

US dairy boom expected to slow down

US dairy experts foresee the boom dairy farmers enjoyed in 2004 to slow down to in 2005 due to higher production. Not helping either is an end on Sept. 30 to the federal Milk Income Loss Contract which has financially assisted farmers during times of low milk prices.

"(The MILC program) has certainly helped us. We had more than a year of record low prices, which were below the cost of production. It made the difference between staying in production and going under," Rio farmer Karen Breneman said.

Breneman sees the end of the program as something which could have long-term repercussions for not only her 80-cow farm, but local, state and national economies.

However, prices are not likely to fall below $12 per 100 pounds of milk this year due to high demand for cheese, says UW Ag Economist Bob Crop.

Those who assist farmers say things may change between now and Sept. 30. "None of my farms have said anything about (the end of MILC,)" Mike Mountain, the Columbia County Field Services representative for Alto Dairy Cooperative, said.

Plus, there are signs out of Washington that the program may continue.

Last month, Senator Herb Kohl introduced a bill to extend the milk program for two years. He said it has been a lifeline for thousands of Wisconsin dairy farmers, providing $414 million over the past three years.

"Without a doubt, we have prevented scores of agriculture bankruptcies because this program was in place when milk prices hit historic lows," Kohl said.

Senator Russell Feingold is also putting pressure on the Bush administration to extend the bill. He wrote a letter to new US Secretary of Agriculture Secretary Mike Johanns last month, asking him to support extension of the program.