Low milk prices have dairy farmers killing cows (the way to raise dairy prices is to reduce supply)

http://www.komonews.com/news/business/66415592.html

DES MOINES, Iowa (AP) - After burning through $1 million in savings and seeing no end to their losses, dairy farmers Jake and Lori Slegers figured they didn't have much choice - they had to kill the cows. So one day last summer their sons tagged all 1,571 cows, loaded them onto trailers at their farm south of Fresno, Calif., and watched them rumble away to a slaughterhouse. Lori Slegers said her husband came into the house and broke down. "He said it was the hardest thing he ever had to do," she said. "Luckily, my boys could do it."

Growing demand in developing nations drove up milk prices when times were good, and dairy farmers expanded their herds. But the global recession hurt exports and left farmers with too much milk on their hands. Milk processors cut the price they were willing to pay farmers, in many cases below what it cost to produce milk.

In the past year, hundreds of farmers have come to the same conclusion as the Slegers: The only way to raise prices is to reduce the supply, and that means killing cows. In some cases, whole herds have been turned into hamburger. In others, farmers have kept their best producers and sent the rest to slaughter.

The Slegers turned to an industry-run program called Cooperatives Working Together, or CWT, which pays farmers going out of business to kill - rather than sell - their cows and help remaining dairy operations by reducing the milk supply. Until this year, the 6-year-old program had paid for about 275,000 dairy cows to be slaughtered. This year alone, it has paid for more than 225,000 to be killed. In addition, individual farmers are sending cows to slaughter at a pace of about 55,000 per week, said Robert Cropp, a professor emeritus at the University of Wisconsin. At that rate, about 3 million cows could be killed in a year.


(There is something so twisted about this.)

Just like the higher oil supplies are driving down the gas prices. That "Law of Supply and Demand" was/is a steaming pile designed to keep consumers from revolting.

but then the price of SOYLENT GREEN will also drop!

man, will this insanity never end????

not sure of the title but, 'in the year 2525...'

will get quarter pounders.

Ah, yes, the commodities speculators and oil prices.....

Yup the dairy farmers get screwed, the consumers get screwed, the cows get killed and the rich keep getting richer.

Where is Madame Guillotine these days?

I feel bad for the cows.

Farming is a business, and like any good business you stash money away for hard times. They did the right thing, put some money away for hard times when business was good. It doesn't take that long, a year or two, for a decent size farming operation to go through a million dollars when times are bad.

I feel bad for this couple, because now that they've gone through their cushion (the million dollars), and the seed money (which was invested in the cows), they have little to fall back on except the tender mercies of banks.

It was these sorts of boom and bust cycles that killed a bunch of small farmers during the seventies and eighties. A lot of small farmers started out with that sort of monetary cushion and were flat broke within a matter of months. Now we're getting this wave of farms going under, and their place will be taken by more and more factory farms. So when you start complaining about GM food, or pus in your milk, or factory farms in general, remember your lack of remorse for these people as karma comes back to bite you.

and those who are given or refused financial help.

They just see the figure of a million dollars and think that these people are wealthy folks, thus it's OK to screw them.

until I moved to the heart of farm country. I don't know any poor farmers--I used to work at a grain elevator and got some eye-opening info on the locals. I don't doubt that there are exceptions. But in this dairy example, the couple overinvested in cows, and then they got hit with a bad cycle. That's the way it goes. I will never feel bad for anyone with a million dollars in the bank--not in farm equipment or other assets, mind you--but actual cash in savings.

Oh, yeah, they were driven out during the seventies and eighties by the same boom and bust cycles we're continuing to see now. Now the farmers that are being driven out are the middle class farmers(there are no upper class farmers, except for corporations). These are the last bastion of small farms in this country, and your lack of sympathy is quite telling. I guess you must be pissed at a lot of middle class couples who saved up over a million dollars for retirement also.

lucky-sperm contest and had land and a ready-made business passed down to them. Around here, kids fight each other to get the farm (or sections of it) from their aging parents. I lost that "farmers are speshul" feeling a long time ago--they're just another form of small business, to me. They're not exempt from market forces and downturns, none of us are.

I have a cousin who farms the same land that has been in the family for 150 years. In addition to crops, he is one of the few local farmers who still keeps a small herd of dairy cattle. I doubt that family tradition will last much longer because the price of milk is so low.

I know just how hard he works and how much he cares about family farming. I also know just how expensive it is to run a farm and how you can be just one crop failure or one market drop away from disaster.

went broke. Didn't we get rid of price supports during the boosh years? Bad move.

Trust me on this one, you could burn through that million just for operating costs in a quick hurry when trying to stay afloat until prices turned around.

When selling your product at a loss in a market that shows no inkling of rising, it turns into a race of how much money you burn through vs. time. You just hope you can outlast the downturn in prices and still have some operating funds left.

I thought that was related to the cost of oil and trucking.

On Edit-others are saying that the prices are lower, but here in WA State the prices are still fairly high for dairy products.

Do you all think they go to a retirement home or something?

like in the last year. before that we were paying nearly $4.00 a gallon. they've been selling cows for slaughter for 6 years tring to get the prices back up? What's wrong with that picture?

Sell all your livestock...Rent your land and become a speculator....

and that makes the article bullshit, or cow shit, which ever you prefer.

They're not cows. They're mass produced products. Who isn't though, ya know?

Unintended consequences.

"They don't realize that once the corporate people take over their bread and milk will definitely go up because the corporations are not going to be able to find people who are willing to work from sunup to sundown seven days a week for practically nothing. The price of everything has to go up once the corporations take over."