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Farmers to cut back on milk production
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by Allan Chernoff - senior correspondent
CNN
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NEW YORK (CNN) -- Dairy farmer Rich Byma pushes a huge bin packed
with a feed mix of corn, soybeans, vitamins and minerals through his
barn, delivering a morning meal for his 300 cows. As his
milk-producers munch, it's like seeing them eat dollar bills for the
veteran farmer because the cost of feed is at an all-time high.
"Corn meal has doubled in price since a year ago," said Byma who has
been running his family's By-Acre Holsteins Farm in Wantage, New
Jersey for 36 years.
Feed accounts for close to half of the farm's operating expenses. So,
farmer Byma is responding to the sky-high price of corn and soybeans
by putting his cows on a diet.
"We watch every pound of feed we give to the cows," said Byma. "We
are very conservative."
Putting his cows on a diet means more than a trim underbelly for
Elsie. When cows eat less they produce less milk.
The U.S. Department of Agriculture says many farmers are doing the same.
"Our projections show for the balance of the year we'll see milk
production slacken and then prices should firm," said Roger Hoskin,
Milk Analyst for the USDA.
Milk prices have eased in recent months after skyrocketing last year.
The national average price of a gallon of whole milk was $3.72 in
April, after peaking at $3.87 last September, according to a USDA
survey.
As milk prices climbed 17% last year, as measured by the USDA survey,
farmers responded by increasing production while consumers reduced
consumption. That rise in supply and drop in demand resulted in the
recent price drop.
But now, dairy experts say, the trend is about to reverse.
"As we get into late summer, into the fall we'll see higher milk
prices because the equation doesn't work for a farmer with
$6-a-bushel corn and a $115-barrel of oil," said Ed Gallagher, Vice
President of Economics and Risk Management for Dairylea Cooperative
Inc.
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