July 12, 2010

Dairy farm a losing business in US

About 40% of all dairy farms, or a total of 46,000 farms in the US went out of business over the last 10 years, due to falling milk prices and rising costs.

Farmers went from getting US$21.70 per hundred pounds of milk to US$11.30 from 2007 to 2009, while animal feed costs increased 35% and fuel prices rose 30%.

A big problem resides in the Federal Milk Marketing Order (FMMO) system, which the US government created during the Depression as a way to keep dairy farmers in business.

"Today, however, the FMMO system has become a weapon used by huge dairy companies to pay farmers as little as possible," an analyst said.