Global Milk Price - is it affecting you?

[Localmotion]

Although now living in Spain, I originate from the UK where I had a dairy farm milking 400 NZ Jersey x British Friesian cows. During my time milking there were some very tough times where the price we received did not cover the cost of production for long periods - and while this was not my main reason for leaving the industry, it was a consideration.

Currently in the UK the milk price is averaging around 24p per litre ($1.36 / gallon) - which is well below the cost of production for many farmers. Some are receiving much less - as low as 20ppl ($1.13 / gallon) which is clearly not sustainable and is a real risk to the future of our industry.

There is quite a lot of publicity about the problem in the UK at the moment - with many citing the cause as global milk price, with an excess of milk products on the global market due to good production around the world last year and also in part because of reduced demand from Russia and China.

Given that TBN is a global site - and especially has a lot of users from the USA and Canada, I'd be interested to know what effect the global milk price is having where you are?

Are you also currently forced to sell your milk at below the cost of production, and is it causing many farmers to pack up?

Also how well do the general public understand your business?

In the UK there is a definite "gap" between the farmer and the consumer, with many shoppers still believing that farmers are all rich...! The supermarkets in the UK often sell milk at a discount as a loss leader, but this gives a false impression to the consumer that milk is a cheap product.

There is an interesting article here Dairy farmers from todays Guardian newspaper which gives a bit of background... the farmer interviewed is an acquaintance of mine and a very good businessman.

 

[Gary Fowler]

I have no idea how much the dairy farmer gets for his milk, but here a gallon of milk is $4.50 at Wallyworld.

 

[tjcarguy]

In Canada we have milk marketing boards and layers of subsidies . Milk and cheese in half price across the border in the US ---Trevor

Canadians don't know the price of milk - The Globe and Mail

 

[2LaneCruzer]

I have no idea how much the dairy farmer gets for his milk, but here a gallon of milk is $4.50 at Wallyworld.

A couple of years ago, we spent a week in St. Thomas, USVI. Milk, if I recall correctly, was about $6.00 or $7.00 per gallon. I'm reasonably sure that price reflected the cost of importing their milk, and if processed there, the processing costs. Electricity and water are extremely high, as is gasoline. The only thing cheap in the islands is liquor. We warned when we went there, to watch how much we drink...because the cost of the mixer in the drink is more that the liquor...so they make them STRONG!

Milk here in Oklahoma is in the $4.00 - $4.50 range.

 

[dmccarty]

Yeah, the HIGH cost of milk is affecting us. My kids will drink a gallon of milk a day, two days max. That is a minimum of 15 gallons at close to $5 per gallon which is at least $75 but most likely well over $100 for milk per month. That ain't chump change. I would say that aint chicken feed but chicken feed is expensive too yet the government says we have low inflation....

There was an article in the Wall Street Journal a few days ago talking about the falling price of milk but we have not seen it yet. The article did say that some dairy farmers in the big dairy producing states were pouring milk down the drain. I can remember this happening over the years when there was an oversupply of milk. The article implied this was the usual problem in farm commodities, prices go up so farmers produce more but they product too much which causes the prices to fall dramatically. Even my kids can only drink so much milk and then no more. :laughing:

Later,
Dan

 

[kcflhrc]

We can still get it here in Kansas for just under $4 a gallon. Still ridiculous.

 

[dmccarty]

A couple of years ago, we spent a week in St. Thomas, USVI. Milk, if I recall correctly, was about $6.00 or $7.00 per gallon. I'm reasonably sure that price reflected the cost of importing their milk, and if processed there, the processing costs. Electricity and water are extremely high, as is gasoline. The only thing cheap in the islands is liquor. We warned when we went there, to watch how much we drink...because the cost of the mixer in the drink is more that the liquor...so they make them STRONG!

Milk here in Oklahoma is in the $4.00 - $4.50 range.

When we were in China late last year, all milk products were expensive. We spent a good hour looking at items and comparing prices in a grocery store our first morning in Hong Kong. :laughing::laughing::laughing: Exciting I know! We arrived very early in the morning and we had time to kill waiting for our hotel room to be available. I think the milk was around $10-12 a gallon but it was UHT milk, I don't think it was fresh milk. I would guess the milk was from Australia or maybe New Zealand. I was in four more grocery stores during our trip, including Walmart! :shocked:, but I don't remember seeing milk in mainland China. It might have been there but I did not see it.

Nuts were very expensive which surprised me. Even peanuts. :confused3:

Later,
Dan

 

[oldnslo]

Last time I checked on milk prices to the dairy farmers was $18 / 100 lbs or approx $1.54 to the farmer. yes this is below production costs when corn is going for $5 a bushel or higher.

For reference: Dad's last milk check in April of 72 he received $11.83 per 100 lbs for grade B. When I retired from dairy in 86 we were getting $13. 21 per 100 for grade A. At that time $16 per 100 was considered the break even point.

mega dairies with there own bottling plant are replacing the small family farms.

 

[smstonypoint]

US milk prices at the farm level have been decreasing in recent months.

Raw milk over here is priced by the cwt. The December price of about $20/cwt. would work out to be about $1.72/US gallon.

The USDA provides monthly estimates of milk production costs -- USDA ERS - Milk Cost of Production Estimates.

For November 2014, the estimated total cost of production was $23.32/cwt. ($14.66/cwt. operating and $8.66/cwt. overhead). Larger operations have lower costs/cwt., so some may be covering all their costs at $20/cwt.

The crop insurance portion of the 2014 Farm Bill has a provision that allows dairymen to insure their margins, with premiums subsidized by taxpayers.

Steve

 

[MacLawn]

Well, I'm for milk boys. We only buy so called organic (that's just milk the way it was 150 years ago. Almost), and pay about $4.50 a HALF gallon I think it is. Since I'm now a geezer, don't drink as much as I used to when neighbor had a registered jersey that gave about 5 gallons a day if I remember right. Now, that was organic milk!

We have friends who were (past tense) dairy farmers in Oregon, supplied milk to Tillamook cheese place. They finally retired, sold cyows, farm, did opposite of wha' we here want to do - moved to the city!

Anyway, Local, if people were like me, y'all milk producing boys would do great. I believe in the land flowing with ----- Yep, milk and honey. Canno' beat it.