Low milk prices lead to death of dairy cows
PHOENIX (AP)--Arizona dairy cattle are being slaughtered because dairy farmers are having a hard time staying in business due to low prices, agriculture officials said.
An informal survey by the Arizona Farm Bureau found that retail milk prices dropped 22 percent, to an average of $3.07 for a gallon of whole milk, from September to January.
Retailers are often selling milk for even less, as low as $1.50 to $1.60 per gallon, to lure shoppers.
Arizona dairymen lose about $100 per cow per month, experts say.
"We have a lot of dairies in the 2,000- to 3,000-cow range. So, they are losing $200,000 to $300,000 a month. The big question is how long will prices stay down like that," said Gary Dyer, president and chief executive officer of Farm Credit Services Southwest, an agricultural-cooperative lender that does half its business with dairy farms and hay producers in Arizona.
Farmers estimate that feeding a dairy cow costs about $180 each month.
Farmers are getting less than half that amount in dairy-product sales. The combination of high costs and low prices has forced farmers to thin their herds to survive.
"I think we are at the bottom (of the market) in March, but it's going to be a long year," said Keith Murfield, chief executive officer of United Dairymen of Arizona. "They (farmers) are culling cows heavily, and we had three producers go out of business in the last three months. I think it's going to be severe."
Arizona dairymen depend more on exports than most producers in other states because of the state's proximity to Mexico, Murfield said.
But now, Mexico is producing more dairy goods, and that's hurting the market.
The U.S. Department of Agriculture said demand for dairy fell because of the recession, worries about tainted milk in Asia, and because New Zealand and Australia are producing and exporting more.
"This is an exceptionally tough time for the dairy industry because the price for milk you see in stores has dropped significantly," said Paul Rovey, a Glendale dairy farmer.
"A lot of dairy farmers have been reducing their cows. They are looking for ways to reduce production, such as by milking twice a day instead of three times a day to reduce costs so they can survive."
Cutting the number of dairy cows also hurts beef ranchers, who fear their selling prices will drop because of all the extra dairy cows on the market. Arizona had about 358,000 head of cattle in January, down from about 373,000 a year earlier, according to the USDA.