As Milk Prices Decline, Worries About Dairy Farmer Suicides Rise : NPR

“The nation’s dairy farmers are facing their fourth year of depressed milk prices. The outlook is so bleak, it’s increased worries about farmer suicides. One recent outreach effort drew criticism.”

Source: As Milk Prices Decline, Worries About Dairy Farmer Suicides Rise : NPR

The situation for dairy farmers in 2017 was not good. A lot of diary operations are running right on the edge, trying to stay profitable at a time when there is ever shrinking demand for liquid milk for drinking, and a glut of other dairy products like cheese, butter and powdered milk. This story above from NPR illustrates just how bad the situation is getting. Go read the article if you have the time. It isn’t very long.

If you don’t have the time, here’s a brief summary: A dairy co-op in the north east US, Agri-Mark, has seen three of it’s farmer members commit suicide in the last few years. Agri-Mark makes Cabot cheese among other products, and has about 1,000 members. In February when it sent out the milk checks, it included a chart showing just how bad the dairy market was looking for the upcoming year, and a list of suicide prevention hotlines. The reporter talked with Will Rogers, who milks 75 cows in Massachusetts, who is having a difficult time keeping above water. Even more upsetting is the fact that his own father who used to own the farm, killed himself because of financial problems.

While the letter from Agri-Mark was probably well intentioned, it certainly added to the stress a lot of it’s farmers are already facing and Rogers says in the article, it might push some farmers so far that they think “there’s no point in going on.” Agri-Mark certainly could have done a better job of trying to communicate with it’s farmer members.

And as if dairy farmers don’t have enough problems, they are increasingly worried about being able to sell their milk at all. Dean Foods just told at least two dozen farmers in Pennsylvania, Indiana, and four other states that Dean will no longer take their milk as of May 31, leaving them scrambling to find a milk processor they can sell their milk to.

The same thing happened here in Wisconsin last year about this time when Grassland rather abruptly dumped a group of farmers, leaving them to desperately try to find a market for their milk.

The article at Dairy Management about Dean seems to be trying to blame Walmart for Dean’s decision. Walmart used to buy it’s in-house brand milk from Dean, but Walmart is building it’s own milk processing facility in Indiana which will come on-line in May, so Dean is going to be losing a significant amount of sales as Walmart switches to product coming from it’s own production facility.

Certainly there is enough blame to go around, but everyone is ignoring the fact that the real reason behind almost all of the money difficulties dairy farmers are having is over production. They are producing more product than the market really wants, which is pushing prices down lower and lower.

There are various marketing boards, government agencies and others trying to help the situation, but almost all of them are focusing on one thing, trying to increase sales of a product that increasingly people don’t really want, and¬†shouldn’t be eating much of. At at time when a recent study just found that 75% of the people in this area are overweight, we have government agencies and marketing boards trying to convince food makers to shovel ever more cheese into their products.

Seventy-five percent. Think about that for a moment. We are facing a national health crisis due to people eating too much of what is bad for them, with government agencies and others trying to figure out how to help people get their weight under control, and at the same time other government agencies and marketing specialists are trying to get food manufacturers to drastically increase the amount of cheese they use in their products.

 

Agrimoney.com | Revival in US milk prices to continue, says Dean Foods

 

Source: Agrimoney.com | Revival in US milk prices to continue, says Dean Foods

This is one of those situations where I don’t know where they’re getting their information because what they’re saying here isn’t what I’ve been reading in the ag news.

Dean Foods seems to be trying to claim farmgate prices are going to go up significantly, that US dairy exports are robust and growing, and that the markets are giving off “buoyant signals”.

But well, no, the market is doing no such thing, and there seems to be no indication that we’re going to be seeing any kind of significant increase in farmgate prices in the US any time soon.

While milk production in NZ and the EU is trending down a bit, here in North America it has continued to rise significantly, with significant numbers of new cattle being added to milking herds and continued increases in milk production. Texas was up about 11%, Minnesota and Wisconsin were up about 2% or a little less. Overall US production is around +1.2% to +2.3%, depending on the numbers you believe, and there doesn’t seem to be any sign that’s going to stop.

As for cheese, yes, there was a blip in the cheese price last week, but that happens all the time, especially as we get closer to major holidays, and we haven’t even begun to make a dent in the truly massive amounts of cheese and butter already in storage. The USDA’s recent purchase of about $20 million in surplus cheese (if I remember the number right) didn’t even make a dent in the amount of cheese in storage. And as of this morning, cheese prices have already started to fall again, down 6 cents over the weekend.

And the statement that “foreign buyers are lapping up” US dairy products is, aside from being a horrible pun, simply not true. Exports of dairy products actually¬†dropped 2% in September.

There is always an uptick in prices this time of year as we approach the holiday baking season. Cream, cheese and butter prices almost always begin to rise around this time of year as retailers and suppliers try to cash in on increased demand. It’s a seasonal blip that doesn’t really indicate any kind of significant improvement in the market.

Maybe Dean foods is just trying to make investors feel a bit better about the fact that Dean’s profits fell by 28% last quarter?