Overproduction sours milk prices

By William Thompson: Freedom Newspapers

PORTALES — A spokesman for Dairy Farmers of America said area dairy farmers are putting money into a fund that will purchase about 60,000 dairy cows this year in an effort to stabilize milk prices.

“In order to keep stable prices we need about 9 million cows,” Walter Bradley said while attending Wednesday’s Ag Expo at the Roosevelt County Fairgrounds. “In 2005 there were about 9,070,000 dairy cows. Consumers are consuming more milk, but the increase in consumption is lower than the increase in production. It’s fair to say that dairy farmers are making a profit, but profit margins are currently going down due to lower prices.”

The program is not new, but has been going on for several years. Bradley and DFA spokeswoman Agi Schafer said consumer milk prices have not been impacted by the program, called Cooperatives Working Together.

Bradley said dairy farmers pay 5 cents per 100 pounds of milk produced into the cow-purchasing fund.
Bradley, former lieutenant governor of New Mexico, said cows are producing more milk than ever and many of them are milked two to three times per day.

Bradley was in Portales on Wednesday, along with John Wilson, vice-president of DFA. Wilson gave a presentation to dairy farmers at Portales’ New Mexico Ag Expo.

Wilson was upbeat about the long-range future of the dairy industry, including the 64 dairy farms in Curry and Roosevelt counties.

“We have a very successful industry,” Wilson told the dairy farmers. “We have growth. There is plenty of money to go around.”

Bradley agreed, saying the industry forecast looks good for the next 10 years as long as production becomes more equal to the demand for milk and milk products.

Locally, Bradley said a Portales dairy plant, DairiConcepts, is a key player in the worldwide milk protein concentrate market.

“DairiConcepts produces the only grade A milk protein concentrate in the U.S.,” Bradley said, “and that plant has room for growth.”

Wilson said dairy farmer cooperatives nationwide need to urge U.S. Congress and Senate representatives to impose tariffs on milk protein concentrate imports so companies like DairiConcepts can better compete in the global market.

Wilson also said within the “next few weeks” dairy farmers might decide to increase the amount of money they pay into the Cooperatives Working Together program. Wilson said he would urge an increase to 10 cents per 100 pounds of milk produced.

Dairies in the Portales and Clovis area bring in about $23 million in sales, according to Bradley, and he said about 85 percent of that money stays in the area economy, going for payment of employee wages and operating costs at the dairies. He said about 1,600 are employed by area dairies and the average hourly wage for dairy employees is $10.80 per hour.