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The potential hefty price rise predicted recently for milk will not occur anytime soon, according to local and statewide dairy leaders.
The average gallon of milk costs about $3, according to the United States Department of Agriculture. Recently, national media outlets had predicted a fear of prices as high as $7 per gallon due to issues related to a farm bill that was tied into the “Fiscal Cliff” in Washington.
Without an extension of the farm bill or a new bill, that price could have doubled, according to Maury Cox, executive director of the Kentucky Dairy Development Council.
“Senator Mitch McConnell worked out a deal that extends the 2008 farm bill, so prices will just go as they have been in the market,” Cox said in an interview with The Sentinel-News in Shelbyville last week.
But the deal is only a temporary fix, he said.
“They’re just kicking the can down the road until the end of August,” he said. “Between now and then, hopefully some issues will be worked out. The real issue is that everybody purchases milk, so most households would be affected by a seven-dollar-a-gallon price.”
“Back in the fall of 2012 farmers across the country were hoping to get a new Farm Bill passed which contained a provision for dairy policies to be changed,” Trimble County High School graduate and Campbellsburg dairy producer Terry Rowlett told The Trimble Banner on Monday.
“Not all dairy farmers like every provision of the dairy part but most were willing to give it a try. But as we know Congress could not get their act together and pass anything.”
Now Rowlett and other dairy producers across the country are waiting to see what legislation might be put forth for dairy when talks resume later this year on the 2013 Farm Bill. Rowlett believes some groups will push the previous legislation that was proposed last fall while other groups push their own agendas. What the outcome will be for dairy, no one knows at this point, he said.
In a family partnership with his wife Sandra and sister Sharon (the longtime Bedford Elementary School principal, now-retired), Rowlett is a member of the Dairy Farmers of America, Inc.’s Board of Directors, representing the Cooperative’s Mideast Area.
Rowlett is president of the Henry County Farm Bureau, state director of the Kentucky Farm Bureau, a member of the board of directors for the American Dairy Association of Kentucky and the Southeast United Dairy Industry Association, and associate director of the Kentucky Dairy Development Council. He also is an advisor for the Kentucky Milk Commission and a commissioner and secretary on the Henry County Planning and Zoning board.
The Rowletts are presently milking 82 cows but normally milk 100 to 120 cows, Rowlett said. They had to cut back recently due to the lack of corn silage as a result of last year’s drought.
“We grow all our replacements so we’ll get back to the hundred number later in 2013 with a large group of heifers calving,” he said. “In total we farm approximately 900 to 1,000 acres, which is owned, rented and leased. We use this land for growing hay, corn for silage, tobacco and pasture.”
Sandra Rowlett is responsible for raising the calves, her husband said. “Without her good calf-raising practices we would not have the replacements to expand or keep our herd at the 100 plus level.”
While consumers may be breathing a sigh of relief that milk prices didn’t reach $7 per gallon, dairy farmers are frustrated. Rowlett posted a questionnaire on Facebook this past weekend asking whether consumers would be willing to pay 50 cents or a dollar more per gallon of milk if that 50 cents or dollar went directly to the dairy farmers and not the processors, retailers or any middleman. He got more than 50 responses.
“The overwhelming response was yes,” he said, “but only if there was a way to guarantee that the extra would go to dairy farmers. Everyone that responded was very supportive of the dairy farmers because they know we work hard in producing a wholesome nutritious product for them to consume.”
Cox said consumers may balk at a rise in, say, fuel costs, but he thinks they would consider a drastic rise in milk prices an even worse crisis.
“They would say, ‘Oh, Lord, we’ll go broke,’” he said. “They can charge four dollars for a gallon of gas, and things will just go right ahead, but not seven dollars for a gallon of milk.”
Milk prices coming back to dairy farmers will decline $2-3 per hundredweight over the next two to three months due to an over supply of cheese on the market, Rowlett said. This figures into a formula used in the Federal Milk Marketing Orders to figure and set the price dairy farmers will receive for their milk. Overall, Rowlett expects that milk prices for 2013 will be good.
“The problem really is our input costs—feed, fuel, utilities, etc.—continue to raise above levels no one has experienced before and there is no profit for the dairy farmers’ families to live on,” he said. “I feel that there will be some who weathered the low prices of 2008-2009 but will not do so again this year with no net profit.”
Dairy producers have organizations such as National Milk Producers Federation—dairy cooperatives and other dairy marketing organizations—lobbying on their behalf in Washington. But not every dairy farmer agrees with what they lobby for, Rowlett said.
“Dairy farmers are very independent and everyone wants something different so it is hard to come to a consensus on a lot of the different things that are proposed,” he said, “thus making it hard for Congress to fully understand what dairy farmers really want. In my unofficial survey those responding said in order to buy milk and not destroy their budgets they would cut back on unnecessary items such as soda and snacks.”
At present there are three dairy farms in Trimble County and 12 in Henry County, Rowlett said, which is considerably less than five, 10, 15 or 20 years ago.