Dropping Milk Prices Could Spell Disaster, Farmer Says
Published: March 5th, 2008
By: Michael McGuire

NORWICH – Family dairy farms in Chenango County are headed for a disaster come April, one local producer says.

That’s because milk prices have dropped significantly in just a month, while the cost of production has risen well-above what farmers are getting paid.

According to the latest figures from the U.S. Department of Agriculture, the liquid milk price for the area this month is $19.95 per hundred-weight. (As a commodity, milk is priced per hundred pounds.) That’s nearly a $3 decrease from February. When the March price is adjusted by the federal government for farm checks sent out in April, it’s likely local dairy producers will get paid even less.

Meanwhile, it’s costing farmers between $24 and $28 to produce each hundred-weight, USDA figures show. The result: Dairy producers will continue losing money, despite what some consider to be relatively high milk values.

“We’re headed for a disaster,” said South New Berlin farmer Ken Dibbell, adding that many farmers are still recovering from disastrous returns in 2005, 2006, and the first part of 2007. “Come April, the pay price will be well below $20. It’s crazy, and we can’t stop it.”

Dibbell’s argument is in stark contrast to what other local producers and economists have said.

Instead, Dibbell says it wouldn’t be a surprise to see more family farms shut-down in Chenango County – there were over 700 when he moved here 30 years ago, now there’s about 230 – and across the country in the coming months and years unless the milk pricing system, set by the federal government based on certain market factors, changes to reflect the cost of production.

What does that mean for the county as a whole? According to the state Department of Agriculture and Markets, for every $1 spent by a dairy farm, approximately $2.50 in wages and related business transactions is contributed to the local economy.

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