Posted: October 16, 2012
A desperate situation for California dairy farmers – experts in the industry estimate that by year’s end California, the largest dairy state in the nation, will have lost more than 100 dairies to bankruptcies, foreclosures and sales.
The nation’s drought and high corn prices are devastating California’s $8 billion dairy industry to the point where farmers can’t afford to feed their cows – and their professional trade organization has been regularly referring despondent dairymen to suicide hotlines.
Milk cows are being slaughtered at the fastest rate in more than 25 years because farmers need to save on corn costs. According to the Western United Dairymen, a California trade group, three dairy farmers have committed suicide since 2009, despairing over losing their family’s dairies.
The problems started in 2009, when milk prices bottomed out and grain prices soared, partly due to the government’s ethanol mandate. Congress is requiring that gasoline producers blend 15 billion gallons of ethanol, made from corn, into the nation’s gas supply by 2015. Dairy farmers were forced to borrow against their land and cows to make their bills.
Then, this year, the worst drought in half a century struck in the Midwest, and corn prices tipped the scale at more than $300 a ton. Historically, the price for corn has averaged $130 a ton. Even though milk prices have slowly come up – in November, it will be at a near record high of $23.17 for 100 pounds of fluid milk – farmers are barely breaking even because of grain and hay costs. Experts predict that consumers will start seeing a price increase for dairy products at the cash register starting in November.
Now, not only can’t farmers pay their feed bills, but they also can’t make their loan payments. As a result, farmers are having to slaughter productive milk cows once worth $2,000 each for meat, and are receiving only $1,200 a head.