September 25, 2003



US Dairy Slump Spurs Farmers To Other Means


US dairy farmers are seeking alternative ways to make a living as sweeping drought and low milk prices challenge the industry.


Taking on a second job, selling cattle or crops or Some have turned to second jobs for extra income. Others are selling cattle and crops or using lines of credit to buy feed and equipment. Even investing in other crops, like dried ethanol corn.


Rocketing feed prices and poor production have driven these farmers to desperation, in a dairy industry which replies on economies of scale. This bigger-is-better trend has led to more extensive facilities with at least 1,600 employees.


"We're all living on equity right now," a farmer in the American West was quoted saying, pointing to the reality that farmers have to face these days with milk prices at their lowest in thirty years and feed prices doubling.


To break even means a minimum of $12 per 100 pounds of milk, say dairymen. Prices this spring have nosedived to less than $10, compared $17 a year before. Farmer tend to compensate for low prices with more production, but the solution actually lies in more feed, which is expensive. Now the search is on for alternatives to alfalfa hay and other  feeds that are traditionally used.


Over in Cheyenne, Colorado, where feed is more readily available and milk shipping costs lower, the lack of water has been the major setback. Water prices have risen as much as 110 percent in some areas, following the closure of hundreds due to a dispute. Dairy farming typically calls for more water than other animal industries.


With milk prices not likely to rebound soon and feed costs high, US dairy farmers are turning to drastic measures to reduce milk production, including killing some of their own cows for food, changing their feed, milking less or cutting back on growth hormones.


As one farmer puts it, dairy farming still continues despite the odds because "farmers have learnt how to live poor."