PREDICTION: SOME FARMS WON'T SURVIVE '09
Wednesday, January 14th, 2009 -- 10:35 AM
Some dairy farmers won?t make it through 2009."I just think it's going to be very, very difficult for many farmers to continue."
That sobering assessment from Greenwood-area farmer Bill Herr. He serves on a number of dairy panels, including the National Dairy Board and the Dairy Farmers of America, Milk Marketing Co-op.
The tail-end of 2008 presented a perfect storm of factors impacting dairy producers: high milk prices led to overproduction; at the same time, high dairy prices drove down consumption, he says.
Now, the bottom has now dropped out of the cheese market?which has pushed milk futures below $10 per hundredweight.
"January milk was $10.88 for Class III; February is down into the nines, $9.92," Herr says, "The prediction is the average price for 2009 will only be slightly above $10 per hundredweight."
The last time milk prices were this low was in 2002, but farmers today are dealing with other problems. Feed, fertilizer and fuel prices are all double what they were then.
"The other commodities are almost twice what milk is, if you compare the year '09 to '02," Herr says.
Another major difference: farmers were able to borrow to make ends meet in 2002, that probably won?t be the case this year.
"Many lenders are requiring 40-percent down payment before they loan anything to farmers today," he notes, "That's going to be very difficult for farmers to pay 40-percent down on some of the bigger items we have to purchase."
According to state statistics, agriculture accounts for nearly 40% of the Clark County?s income.
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