Low milk prices taking a toll on dairy farm income

From WKBT.com

LA CROSSE - The Department of Agriculture expects an almost 35 percent decrease in net farm income this year and dairy farmers are taking a majority of that hit.

Local farmers say because supply exceeds the demand for products, like milk, the cost has fallen dramatically over the last year.

As technology improves dairy farmers are seeing a big benefit.

Dairy Farmer Todd Servais says, "Dairy farmers are getting a lot more efficient and we can get more milk out of fewer cows."

While that may seem like a good thing there is a downfall. A surplus of milk is driving the prices down. Another hit to the industry commodity prices, things like corn, grains and soybeans are also down.

People's Food Co-op General Manager Michelle Schry says, "You see things like milk and dairy impacted most. The farmers feed those kind of things to animals so often times you see dairy and meat prices affected first when commodities drop."

The People's Food Co-op tries to buy their products direct from the farmer. So their customers get the benefit of lower prices and farmers see a little bigger paycheck.

Schry adds, "That makes a big difference because we're able to pay a slightly higher price to the farmer than they would get going through a wholesaler or manufacturer."

But for now dairy farmers are just looking forward to the new year.

Servais says, "We've had very low prices and 2010 is definitely looking up to the dairy industry, higher prices and more exports."

Another bright spot for the dairy industry milk prices in November were up about $4.

Local farmers say that's in part because of the holidays and people needed more milk for cooking and baking.

Tags: news, northland, agriculture, agribusiness