My neighbor lost his dairy

[Burnin' oil]

Some things just suck.

He's in his late forties, Portuguese, barely speaks English. I understand about 10% of what he says, but he and his family are great neighbors. He worked his butt off to buy a herd and then bought the dairy next door. Started to build up his herd and was excited about his hard work paying off. Then, in Feb. of this year, his milk buyer imposed a quota which was a little more than half of what he was producing. Bottom line - he ended up being charged back for over-production, had no income for several months, was dumping 400 gallons of milk a day and still had to pay to feed his whole herd. He started selling cows and cutting production but he could not recover. All his cows are gone and I think he's walking away from the property.

Talking to him about it is like watching a documentary. Broken English, tears in his eyes, talking about the American dream, working hard, sacrificing, and then getting everything taken away because of a milk glut and incredibly high feed prices. Complete discouragement. Merry Christmas to him.

[vash]

wow, i read "diary".

that sucks. double sucks that there are kids that could really use that milk.

[peppy]

Dairy farmers around here have been getting F***ed for years.

[The Gaijin]

Dairys up-state New York have been getting killed for years now. Imagine if your family had been doing it since 1790-something...

If it is not the watershed rules, then it is the price of fuel. The only break they got recently is when corn and feed when sky high, as they mostly feed their herds on pasture and hay.

[sand_man]

Originally Posted by vash

wow, i read "diary".

Me too...

[Moses]

How in the world does this make sense? Why not package and irradiate the milk and send it to the third world as part of a hunger relief program? Hell, you could dehydrate it and do the same thing.

Creating a fiscal calamity out of efficient production is an epic FAILURE. Couldn't he find new buyers? This is such a sad story.

[Burnin' oil]

California does not have enough processing facilities. I would guess that millions of gallons of milk have been dumped in California this year alone. There are just a handful of milk buyers in the state and they all imposed quotas. There are no other buyers available.

[looneybin]

burnin' oil, are you near Riverdale?
I had a dairy farmer client that sold is farm & moved up to Tilimook Oregon to be in some cheese co-op

[hardflex]

I was talking to woman the other day that is in the Dairy business here in TX She echoed tough times as well. They are getting paid 89cents a gallon for milk, same as 10 years ago. But expenses have 10 years worth of increases.

Somebodies making some mark up.

[competentone]

Originally Posted by Burnin' oil

California does not have enough processing facilities. I would guess that millions of gallons of milk have been dumped in California this year alone. There are just a handful of milk buyers in the state and they all imposed quotas. There are no other buyers available.

The TV commercials say the cows are happier in California.

I guess the same doesn't ring true for the cows' owners.

[Moses]

Originally Posted by Burnin' oil

California does not have enough processing facilities. I would guess that millions of gallons of milk have been dumped in California this year alone. There are just a handful of milk buyers in the state and they all imposed quotas. There are no other buyers available.

Hell, let's open a wildcat milk processing plant. We'll drive the price of milk down a bit but who cares? I smell an opportunity!

[futuresoptions]

Tell him to become a cheese producer... to go hand & hand with the wineries over there.... Just an idea.....

[teenerted1]

talk about crying over spilt milk...sorry couldnt resist.

too bad about your neighbor. but why couldnt he find a second buyer? half his production goes to each and wouldnt have to sell anything but milk.

[VaSteve]

Originally Posted by competentone

The TV commercials say the cows are happier in California.

I guess the same doesn't ring true for the cows' owners.

cows are happier since they are working half as hard. this story is f*ed. hard work and success being punished...ridiculous.

[lendaddy]

Originally Posted by Moses

Hell, let's open a wildcat milk processing plant. We'll drive the price of milk down a bit but who cares? I smell an opportunity!

This is not a crazy idea really. I don't know if you're serious but a tanker project on a "milk run" could make a ton of sense (assuming this dumping really is happening).

[Moses]

Originally Posted by lendaddy

This is not a crazy idea really. I don't know if you're serious but a tanker project on a "milk run" could make a ton of sense (assuming this dumping really is happening).

I was serious. Money to be made.

[Nathans_Dad]

Isn't there some sort of biofuel we could make out of milk? Then the gubmint would subsidize him...

[daepp]

Chino or Kern County?

[Shaun @ Tru6]

http://www.cattlenetwork.com/top40_Content.asp?ContentID=277494

12/18/2008 9:56:00 AM

More Milk & Weakening Global Demand Lower Price Forecast



Falling feed costs, which are likely to continue into 2009, will provide little relief for dairy producers. Milk prices are also declining and are expected to continue to do so into next year. Current USDA forecasts place the season-average corn price between $3.65 to $4.35 per bushel and the average soybean meal prices at $240 to $300 per ton in 2009. Falling milk prices leave the milk feed price ratio at a projected 1.9 for 2009. A ratio in this range suggests continued pressure for contraction. Cow numbers are forecast to decline slightly to 9,245 thousand head. However, yields are forecast to rise about 1 percent to 20,700 pounds per cow, an increase well below trend. This small yield increase is sufficient to nudge milk production to 191.4 billion pounds in 2009, a below-trend increase of less than 1 percent. In the face of weakening demand, domestically and especially internationally, milk and dairy product prices will continue to glide downward throughout much of 2009.



September commercial disappearance, all products milk equivalent fat basis, is up from a year earlier by 2.7 percent. Butter had the largest upturn on a percentage basis. 2008 production continues to outpace last year’s for the major products. Commercial use on a fats basis is expected to climb in 2009 by about 2 percent, which is about trend. What has changed the price outlook is softening export sales. Global dairy demand has been weakened by recession, and supplies of products from the United States, the European Union and the Oceania countries remain ample. Trade data are reflecting the fundamentals. In October cheese exports fell for the second straight month, with exports as a percentage of production falling to 2.5 percent, the lowest share thus far in 2008.



The stronger dollar has also disadvantaged US producers. The outlook is for continued weakening exports into 2009, especially for dry products. Exports on a skims solids basis are forecast at 23.5 billion pounds, the lowest since 2005. On a fats basis, exports are forecast to slide to 6.7 billion pounds, well below 2008’s projected 9.1 billion-pound total. Butter exports held steady at low levels not seen since early 2008 and down about 25 percent from the levels that prevailed through August. Nonfat dry milk (NDM) exports have fallen to the lowest level of the year, and to a near-record low as a percentage of production. Weaker exports next year, along with slightly higher milk production, will soften prices across all products and milk classes. Prices for the major dairy products have trended downward through November.



Prices for the major dairy products are forecast to decline in 2009. Cheese prices are forecast to average $1.655 to $1.735 per pound next year, a decline from 2008’s projected average of $1.890 to $1.900 per pound. Butter prices are expected to average $1.265 to $1.375 per pound next year compared with $1.420 to 1.450 this year. The price declines for dry products are expected to be steeper, with NDM prices falling to 87.5 to 93.5 cents per pound in 2009, a substantial drop from an average $1.215 to $1.235 per pound this year. Dry whey prices are forecast to average between 19.0 to 22.0 cents per pound in 2009, down from 24.5 to 22.5 cents a pound this year.



Lower product prices will lead to lower milk prices in 2009. The forecast Class III price is expected to slide to $14.50 to $15.30 per cwt from an average $17.40 to $17.50 per cwt this year. The Class IV prices are forecast to decline even more sharply next year to average between $10.75 and $11.65 per cwt, down from $14.55 to $14.95 projected for 2008. The all milk prices are expected to fall to between $14.95 to $15.75 per cwt next year, a drop from 2008’s expected $18.30 to $18.40 per cwt.



Source: Livestock, Dairy, and Poultry Outlook, USDA

[Shaun @ Tru6]

http://www.agnetwork.com/Dairy_News.asp