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June 10, 2014

Area farmers: Dairy prices have improved

By Mark Boshnack Staff Writer
The Daily Star

---- — The financial picture for area dairy farmers has improved because of several factors that have caused a rise in the price of milk since last year, those interviewed Monday said.

While they said they’re uncertain how long the rise will last, it is expected to remain above the cost of production at least through the end of the year.

Weather and exports are two of the factors for the rise, according to Cornell Cooperative Extension of Delaware County educator Mariane Kiraly. The current price probably peaked in April or May for Boston Class I (fluid) milk at $26.90 per hundred pounds. The actual price paid area farmers is generally less. The price for milk in April 2013 was $20.91. While the cost of production will be vary between farms, it averages about $19.50, she said.

Exports are a big driver of the increase, accounting for 17 percent of the overall national production, Kiraly said. It wasn’t that long ago that exports accounted for only 1 to 2 percent, she said. The cold weather in the Midwest last year hit big producing states such as Minnesota and Wisconsin hard, and production is still recovering. The dry weather in California and Texas has also had an impact, she said.

The price is expected to start declining, possibly this month, but it is not expected to decline below $20. Farmers are using the funds for such things as replacing inefficient equipment, paying off credit lines and saving, she said.

“It’s quite a bit better,” Danny Buel, whose Franklin farm milks 50 Holsteins said. “It allows you to get ahead of the game.”

Buel said the increase allows farmers to make necessary repairs and save. He said he doesn’t expect the price to go as low as it was a couple of years ago; milk was $15 per hundredweight in 2009.

Shannon Mason, whose Jefferson farm milks 50 Jersey cows, said the price is the highest she has seen since she started farming in 2006.

“You never know how long its going to stay that way” she said. Historically, “it’s been a roller-coaster ride,” she said, but the forecast is that it will stay this way for a while. “We have our fingers crossed.”

With the cost of fuel and feed remaining at elevated levels, higher prices are necessary, she said. At this point, the farm is using the income to catch up on its investment in Cowbella, a brand the farm has developed to get a better price for its product. It will continue to shift more milk into that brand, she said, because even with the current prices, it is much more profitable than sending milk to the processor.

Janice Smith of Franklin said the prices are “a promising change. It has given us a chance to catch up on bills,” instead of having to pick and choose who to pay, as the farm did a year ago. Her family farm milks about 100 Holsteins.

“It makes life a little easier,” she said. The foreign market and the demand for milk at area yogurt producers are all factors, she said. It always drops a little bit during the summer, she said, with demand less because school is out. But “the future looks promising,” she said.