Thursday, October 15, 2009

The Reality of the Dairy Crisis

If you've read my Friday Fun Farm Facts posts at all, you can't have missed the fact that compared to other people, Americans spend very little of their disposable income on food. In discussions about rising or "unbelievable" grocery prices, I find myself biting my tongue a bit. I think we've been spoiled by very affordable food prices, and we really don't know how good we have it. A little teeny spike in the prices, and we're whining like there's no tomorrow.


The reality is that often our cheap food is subsidized by those who raise it.

Right now, milk is selling in the range of $1.70-2.10 per gallon in my area. A news article from an Iowa TV station reports that farmers are getting paid about 90 cents per gallon, while the farmers' costs are at $1.40 per gallon. That's right--for every gallon of milk they produce, they lose 50 cents.

Many family farmers run a pretty tight ship. Sometimes a spouse works off-farm to provide benefits and much-needed income. Even with that, losing money at this rate becomes alarming quite quickly.

I am not one to propose bail-outs for farmers (or anyone else, for that matter). But I would dearly love to see the cheap food system overhauled. I think the government has to be involved in fixing this broken system. Could you help encourage them to do so?

More info about the dairy farmers' plight can be found at the Farm Aid website.

Are any of you hearing about the dairy crisis in the media?

7 comments:

  1. While you may be paying $1.70 per gallon in Iowa for milk, we're paying $5.69 per gallon for milk in California. Of course, that's because we're choosing organic milk. Sure, I know it's more expensive to produce, but, hey, if we're going to subsidize, why not fund the healthiest possible food rather than modified? My favorite beef comes from a family friend who raised their beef on - grass! Real, live, wild grass. 'Course, they have the land for it, and they're not MASS producing in the way too much of our beef is produced today, but their system has worked for them for five generations. Good enough for me.

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  2. Hi Jen. I'm glad to hear that you have the choice as to whether or not to buy organic milk. Fortunately for those whose income limits their choices, there are still dairy farmers (many of them small family operations) who mass-produce (wink, wink) milk that is not organic. It would be a shame if there were ONLY organic, grass-produced milk (or beef), as many people would have to do without.

    And as for subsidizing, what I tried to say was that the FARMERS are subsidizing the food production, in that they receive fairly low wages for their important work. What you are doing is not subsidizing--you are purchasing a product. And it is your right to choose, within your means--which product. Hooray for you!

    Thanks for the comment...

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  3. Here in upstate NY the rising fuel prices, grain prices,and terrible weather has created a unfortunate crisis for our local farmers and they struggle to continue to produce their milk, wool, eggs..etc. Currently every farmer in our area are banking on the Marcellus Gas leases and gas wells planned for their properties to survive, but our government has also put a hold on that as well. Where should they go now?

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  4. These may be questions that are common knowledge, but as a non-farmer: Who determines the amount a farmer is paid? Since consumers pay the retail price (set by the stores?/ by their costs?) why aren't the farmers setting their prices? or is there an over-supply that drives prices down? Can additional markets/uses be found?
    PS. Would love some farm fresh milk to make homemade ice cream, but is it even possible to get it "straight" from the farm?

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  5. Thanks for the comment, Anonymous.

    Mulch, I'm going to have to get back to you on this one. I do know that farmers, unless they direct sell to consumers, never get to set their own price. If they don't want to sell today, for today's price, they can wait for a better one. Of course that doesn't work well with milk.

    I've often wondered the same thing, and so your question, and my continuing inability to answer it has caused me to finally ask someone who might know. I'll let you know when I hear back from him. If the lovely state of Michigan doesn't eliminate his position first...

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  6. I have not heard anything about the dairy crisis in the news, but then I rarely watch network news. I get virtually NO info from that venue. I haven't seen it online either, but I will go looking. I knew that dairy farmers got very little return on their milk, but I had not idea they were actually LOSING money! That's very alarming. Curious about Mulch's question also.

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  7. Thanks for posting this Lona. I have posted a link to it on my farm blog :) Hope you don't mind!

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