Prices paid to dairy farmers take yet another dip

Leaza gave birth to this baby heifer on the morning scads of dairy convention-goers were set to converge on L & L Ayrshires in Stockport for a tour. Owner and operator Eliane Lunsford said that in most years young heifers would be a blessing, but the past year of low milk prices makes such births almost a burden. It's doubtful the young heifer would bring a good price at sale, and keeping her means having an even larger herd that can't produce enough milk to pay for its own existence. (Photo by Lynda Waddington/Iowa Independent)

STOCKPORT — Iowa dairy farmers attending a farm tour near this Van Buren County town last week were the first with the bad news: Milk checks showed yet another decrease, in some cases as much as 70 cents per 100 pounds of raw milk. Farmers who had traveled to Iowa for a national convention (of which the tours were one part), and had not yet seen their milk checks, could only worry about the bad news likely awaiting them at home.

“I’m down to $11.78,” said Elaine Lunsford of L & L Ayrshires in Stockport, estimating the price was a roughly 60 cent drop from the previous month. At the end of the month, she estimates, the family-run farm will need an additional $10,000 in order to break even.

“We’re all being hit and crippled by this,” she added. “I think many of the dairy farmers here today are hopeful that sustainable prices will return, but they also have set limits for themselves as to how long they can afford to wait.”

For many of the dairy producers, September has been set as make-or-break month.

Chris Estrala, a central Nebraska dairy producer in Iowa for the 2009 National Ayrshire Convention, didn’t yet know the status of his milk check, but was preparing himself for more bad news.

“Our family is one of the unusual dairy farming families in that we moved east,” explained Estrala, a fourth-generation dairyman who once lived and farmed in California. The family decided to make the move to the Midwest, he said, primarily for quality-of-life reasons, but also because of changes within the California dairy industry.

“A small farm out there is 800 cows,” he said. “When we were farming there, only two dairy producers were smaller than us: the local high school and the local college. That made things difficult from a financial standpoint, because we were having difficulty finding institutions willing to help finance such a relatively small operation.”

The family has kept in close contact with other farmers and friends out west and is concerned about reports of western dairy farmers, facing the lowest raw milk prices since the 1970s, committing suicide. Yet, even as reports of suicides and farm closings mount, Estrala is not convinced that an answer will come from the federal government.

“Everyone is getting their butts whooped right now — I mean the automakers and everybody. How does anyone think they are going to go to Washington and get money for us?” he asked. “I think that we just got so good at producing so much milk. Then there was a push to open up new world markets. But then the global market sort of collapsed on us, and so we are left with lots of milk.”

Not all dairy farmers agree with Estrala’s assessment of what went wrong, although most of the larger dairy cooperatives and nearly all federal elected officials believe over-production played a role. Some farmers point to increased milk consumption nationally, but massive foreign imports of non-fat milk solids as reasons prices are down. Regardless of their assessment of the problem, however, all milk producers insist they would be better off if what they were being paid for raw milk was comparable to what consumers are paying at retailers.

“That’s the big question, isn’t it? Why are people being charged so much for a gallon of milk at the supermarket?” asked Lunsford. “Retailers are making incredible profits while dairy farmers wonder how they are going to feed their herd.”