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Milk prices may rise as dairy industry faces "crisis"
Story By: David Ortiviz
Source: KOAA
Published Tue Feb 17, 2009, 06:30 PM MST
Updated Tue Feb 17, 2009, 06:30 PM MST
An estimated 1.5 million dairy cows could be slaughtered this year as dairy farmers face very difficult times. One dairy farm here in Southern Colorado says the industry is in crisis mode and it could affect milk prices.
Milk, cheese, and butter are staples in almost every home. So you might find it surprising the dairy industry's profits have turned sour.
"The entire industry is in an economical crisis mode," said Buddy Nichols, owner of Wholesome Milk Products. Nichols is a third generation dairy farmer in Canon City. He blames declining sales, fewer exports, and the rising cost of hay, for the nationwide slump.
"The consumer will probably see higher dairy prices just because the industry will be so damaged," said Nichols.
The bottom line, Nichols says he loses 50 cents for every gallon of milk he sells. Farmers can't raise milk prices, because it's set by the government.
So for Nichols, desperate times call for desperate measures. "We're having to go through our herd and decrease numbers in order to generate cash to cash flow on a daily basis," said Nichols.
Nichols isn't alone. There are some estimates 1.5 million of the nation's 9 million dairy cows could be slaughtered this year, as farmers look to save money.
"This is a total reorganization of the dairy industry," said Nichols. "Business will not be conducted after this, the same way it did going into this," he added.
The Western Dairy Association estimates dairy farmers are losing ten dollar per cow, every day. Sadly, that could mean the demise of some family farms in Colorado, that have been around for decades.
Local family-operated dairy farms have dwindled. Nichols says during the 1960s, there were about 50 farms in Fremont County alone. Today, there are only ten independent Colorado dairy farms south of Denver.
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