Nation's Dairy Cows Headed For Slaughter As Milk Prices Sour

By: Tracie Cone, Associated Press Email
By: Tracie Cone, Associated Press Email

TURLOCK, Calif. (AP) - Hundreds of thousands of America's dairy
cows are being turned into hamburgers because milk prices have
dropped so low that farmers can no longer afford to feed the
animals.

Dairy farmers say they have little choice but to sell part of
their herds for slaughter because they face a perfect storm of
destructive economic forces. At home, feed prices are rising and
cash-strapped consumers are eating out less often. Abroad, the
global recession has cut into demand for butter and cheese exported
from the U.S.

Prices for milk now are about half what it costs farmers to
produce the staple, and consumer prices are falling. Unless the
market can be bolstered, industry officials project that more than
1.5 million of the nation's 9.3 million milking cows could be
slaughtered this year as dairy operators look to cut costs and
generate cash.

"This could destroy our dairy infrastructure," said Mike
Marsh, CEO of the United Western Dairymen trade association.

Three months ago, mature milkers would sell for $2,500 to
another dairy, but with nobody buying, dairymen are selling them on
the beef market for only $1,100 each.

It is not just elderly cows that are going to slaughter, said
Jon Dolieslager, owner of the Tulare County Stockyard in the heart
of California dairy country.

The 262,500 slaughtered nationally in January is 43,500 more
than in January 2008. Since September, federal livestock reports
show that dairy cow slaughter is up 30 percent, while beef cow
slaughter is down 14 percent.

"If milk was worth something, they'd be keeping them," said
Dolieslager.

Some dairymen have become so desperate that they are not even
bothering to haul to feedlots the newborns whose births keep milk
flowing at higher levels.

Investigators in San Joaquin County are trying to determine who
dumped 30 dead bull calves on country roads to avoid rendering
costs or hauling them to auction, where they fetch $5 each but cost
hundreds and hundreds more to bottle feed special formula. The
group Farm Sanctuary is offering a $2,000 reward for the culprit.

"Apparently it was someone trying to save money who just dumped
them," said Susie Coston, the group's national shelter director.

As of Feb. 2, the price farmers receive for a gallon of milk has
been 80 cents a gallon, less than half the $1.65 a gallon the
California Department of Food and Agriculture estimates it costs to
produce.

"I don't ever remember being able to produce milk at that
price," said dairyman Ray Souza, who got into the business in
1963.

The new price was the biggest one-month drop in 54 years in
California and doomed cow No. 4424, a fat Holstein who
instinctively lumbers to her place in the milk line but has become
an economic liability at Souza's dairy.

"She's not giving enough milk," Souza said as he scanned
computer records showing output for each of his 900 milkers. "She
can't stay here."

The price is set by the Chicago Mercantile Exchange and is based
on the price paid for powdered milk, where 37 percent of
California's milk is sold. Only 14 percent goes into sales as
liquid milk.

U.S. milk, butter and cheese, which enjoyed record worldwide
sales last year, no longer are in demand because of the triple
whammy of decreased international consumption in a falling economy,
a stronger dollar that makes exports less attractive and the scare
over melamine contamination in Chinese milk.

Those trade issues have coincided with a three-year California
drought that has increased the price and availability of alfalfa
hay, and corn costs that have doubled because of competition from
ethanol producers.

"We need to get supply and demand into alignment as quickly as
possible so this economic trainwreck isn't strung out," said Marsh
of the industry association.


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