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One year ago, Missourians couldn’t stop talking about the high price of milk: at many grocery stores it was selling for about four dollars per gallon. Today, that price has dropped considerably. This reduced price of milk, combined with the rising costs it takes to maintain a herd of dairy cows, has led to a crisis for many of the state’s dairy farmers. Several have had to send their cows to slaughter, and others are selling their assets or sinking further into debt. They have appealed to Governor Jay Nixon and the state for help, but so far, little has come in the way of relief. KSMU’s Jennifer Moore has this report.
Reporter standup: Right now, I’m standing about an inch and a half deep in what appears to be a mix of mud, hay and cow manure...I’m really glad someone invented boots right now...The owners of this family farm say they’re not hurting as badly as others, since their mortgage was paid off years ago. But they say the stories they’re hearing from others break their hearts.
"A lot of them are just giving up and selling out," says Janice Ling, owner of Robthom Farms just northeast of Springfield. "Of course, they can’t get the return, because their animals are of less worth now, because no one has the money to buy them."
Ling's family has owned this dairy farm for over 100 years, and she says she’s been out milking every day since she was eleven.
On this day, the hydraulic milking machines are hissing away.
Ling brings in twelve cows at a time, sprays their udders with disinfectant, and hooks up the suction tubes. The milk begins to flow into large, transparent vats. The white liquid will eventually find its way to Hiland Dairy and be distributed to grocery stores throughout Missouri and the region.
But right now, it’s costing Ling and other dairy farmers more to produce this milk than they can sell it for.
"There are some dairymen that are just selling their cows—taking them to the salebarn--because they can’t afford to lose any more money. And then there are others that are just hoping things will get better," Ling says.
She says her family was setting money aside for years to build new facilities for the cows. Since the price of milk plummeted, that money has just gone to pay bills.
To understand how they got to this point, we have to take a step back and look at the price of milk: it fluctuates on a simple supply and demand pattern.
Some experts say the price of milk is on a three year cycle, and that 2009 just happens to be in a low valley on that cycle. But that fact, combined with the bad economy, and the rising costs of grain and transportation, has created the perfect storm for the nation’s dairy farmers.
"I’m just hoping and praying things get better," says Tony Rickard, a dairy specialist with the University of Missouri Extension Office in Monett.
He said in October, it cost southwest Missouri farmers around 17 dollars to produce one hundred pounds of milk. But when they went to sell it, the average price they received for that milk was about 13 dollars.
Richard says local dairy farmers have sold what assets then can, and are now operating on lines of credit.
“When it costs you five dollars more to produce it than you’re receiving for your product, you can only live on assets so long,” he says.
Rickard says a thriving dairy farm impacts several sectors: transportation, electricity, and veterinary services, to name a few.
But since the state of Missouri has not committed to sending stimulus finds their way, dairy farmers are taking measures into their own hands.
Rickard is supporting a national, farmer-funded program called the Cooperatives Working Together program, or CWT. Here’s how it works: dairy producers pay into a fund, and the managers of that fund use the money to buy herds of dairy cows which will then go to be slaughtered. The idea is to reduce the amount of milk produced nationwide. Dairy farmers expect that once that milk supply decreases, then demand, and prices, will rebound sooner.
"It’s a self-help. They recognize that we need to do something to correct our industry. We can’t always depend on the government to do that," he says.
In October, President Obama signed legislation that would give $290 million dollars in temporary relief directly to dairy farms. Rickard said that every bit helps, but given the debts some are facing, the temporary relief won’t last long.
Earlier this year, the Missouri Farm Bureau asked Governor Jay Nixon to call the legislature into a special session to address what they’re labeling as a crisis. Nixon never called for that special session.
The governor says he has asked the director of Missouri’s Department of Agriculture, Jon Hagler, to go out and talk to dairy farmers to learn more about the situation.
“Their challenge is very real at this point, and we are looking at a myriad of options as to what we can do. I mean, just doing a straight state price support is very difficult to do, because it’s hard to get the right trigger in there for when those prices do go back up,” Nixon said.
Meanwhile, dairy farmers like Janice Ling in Springfield will continue to sit tight, count their losses, and keep milking.
For KSMU News, I’m Jennifer Moore.