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How Now, No Cows?

May 5, 2016
by Dan Voigt , Emmetsburg News

The headline caught my eye quickly "Milk industry drying up in Northern Minnesota?"

Growing up on a farm where our neighbors milked cows, I have a pretty good idea of the dairy business; spent some time helping the neighbors do the milking chores, and while I was glad I didn't have to do them every day, twice a day, I understood the attraction to the big Holsteins, the little calves and that never-empty pitcher of cold milk in the refrigerator. The pitcher got low - wash it out, walk out to the barn, go in the milk room and fill it from the bulk tank.

But as they say, that's all water under the bridge. I went back to the article. Apparently, the price for a gallon of milk has dropped by roughly $1.50 in recent months paid to producers, and coupled with the current $2.25 price neighborhood, the dairy industry is undergoing a change that is relegating the small, single family dairy farm, like my farm neighbors, to the history books.

According to a 2012 Minnesota Department of Agriculture survey, there were 25 dairy farms in Carlton County, 10 in St. Louis County and zero farms in both Cook and Lake counties. At the start of 2016, the Department of Agriculture says there are just eight farms in Carlton County that ship milk to markets.

Like any commodity, milk prices have been subject to market pressures just like the cost of beef and pork. In 2014, milk producers were paid almost $25 per hundred pounds for their milk, but now, that price has fallen to about $14 per hundred pounds. For a large commercial-scale dairy operation, such prices can be spread over a large number of animals in a herd, but for a small producer with 25 or 30 animals, the costs of production versus price paid aren't penciling out.

Add in consumer demand, and milk production and distribution becomes big business. But in regards to the cost of milk, the biggest factor is the price of the raw material, and that price has fallen some 30 percent from those peak 2014 prices. One of the reasons for that decline is the lifting of European milk quotas, which lowered their reliance on imported milk. A trade embargo with Russia and a decline in Chinese imports have also reduced demand for US milk products. Exports of dairy products had accounted for 15 percent of all product sales, but those exports have fallen to 11 percent recently as well.

Add in the strength of the US Dollar on the worldwide markets, also makes it tough for dairy producers to sell their products around the world, and that is creating a domestic surplus of milk products.

But what may be the biggest factor are we the people. Americans are drinking less milk, but increased consumption of dairy products such as Greek yogurt, which requires three times more milk to produce than regular yogurt, keep the industry going.

But yet, the dairy industry is still limited in its market. It's not like a dairy farmer can sell their product at the local farmers' market like a gardener.

Sadly, the combination of factors is squeezing more and more small producers out of the industry, just like the Farm Crisis of the 1980's. Trying to visualize our area without a dairy farm or two is tough to do. The dairy producers who continue their lifestyle deserve our support. Let's hope that this aspect of rural life doesn't totally disappear from our countryside. There's just something about watching a cow, contentedly chewing her cud, watching the world go by from her pasture, that just seems right about the world.



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