More questions that people ask us:
How bad a crisis is this really? It is estimated that since January of 2009, we dairy farmers were losing an estimated $100 per cow per month. Our calculations verify this. How long would you/could you run a business this way?
Let's take the gallon of milk I buy in the store, how much are you, the average farmer receiving for that gallon of milk? Let's take 2008, when there was a shortage of milk in this country. You paid $4 for a gallon of milk in the store. We, the dairy farmer got $2. The $2 we received was hardly covering our costs, because fuel and fertilizer costs went so high.
Who got the other $2 of the product you produced? The processor and the retailer got the other $2.
Then let's take the recent price that I pay in 2009 of $3 a gallon in the store, how much do you, the dairy farmer, receive? All this past year we have received about $1 of the gallon sold to you in the store.
If you only get $1 of the $3 that I am paying for a gallon of milk, who gets the other $2? The processor and the retailer get the $2, the same as the year before.
And how much does it cost you to produce that gallon of milk? It cost us, the dairy farmer, about $1.50 in 2009 to produce a gallon of milk.
Wait a minute, you mean the processor and the retailer are still getting the $2 for that gallon of milk both in 2008 and 2009, while you the dairy farmer, are receiving a $1 less this last year? That's correct. Notice, I did not say that it is 'right'.
Tuesday, December 29, 2009
Thursday, December 17, 2009
Where is the media????
The following will be answers to questions that people frequently pose to us:
Have we really heard much about this dairy crisis? No. Many dairy farmers in America are being forced out of business and the math is simple to calculate that this will continue at an alarming rate: the price we receive for our product is far below what it costs to produce. Our agricultural and polical leaders must understand the full gravity and ramifications of our dilemma, as must the general public. If we, like many others, are forced to close our barns, we do not want these people to respond with: "I did not know...", "I was not aware of how bad it was...", "We did not realize...." This year, as we talked with our friends, both locally and out-of-state, most of them were totally surprised by our situation. The media has just not covered this.
What is the problem that the American Dairy Farmer is facing? We have been facing the same frustrations for years: we cannot control the cost of our rising expenses and we cannot set the price for the product we sell. We have absolutely no control over the price we are paid for our milk. Besides this double-edged sword, both these prices vary, sometimes dramatically, from month to month and year to year. The current, dramatic downturn in the global economy has only exasperated this half-a-decade old problem.
Have we really heard much about this dairy crisis? No. Many dairy farmers in America are being forced out of business and the math is simple to calculate that this will continue at an alarming rate: the price we receive for our product is far below what it costs to produce. Our agricultural and polical leaders must understand the full gravity and ramifications of our dilemma, as must the general public. If we, like many others, are forced to close our barns, we do not want these people to respond with: "I did not know...", "I was not aware of how bad it was...", "We did not realize...." This year, as we talked with our friends, both locally and out-of-state, most of them were totally surprised by our situation. The media has just not covered this.
What is the problem that the American Dairy Farmer is facing? We have been facing the same frustrations for years: we cannot control the cost of our rising expenses and we cannot set the price for the product we sell. We have absolutely no control over the price we are paid for our milk. Besides this double-edged sword, both these prices vary, sometimes dramatically, from month to month and year to year. The current, dramatic downturn in the global economy has only exasperated this half-a-decade old problem.
Saturday, December 12, 2009
$40 for a gallon of milk?
Confession #5 - Two acquaintances I saw in the same day recently, actually summed up this blog quite uniquely:
What did happen in 2008 and 2009? The downturn in the world economy hit the US dairy farmers quite harshly. In my book-keeping, I had concluded it actually started before that.
In my brief encounter with the man who prepares the taxes for our farm business, we discussed the economy. He clearly validated my observations when he soberly reported, "I prepare the taxes for many farmers in the area, and it has not been good for five years"!
The other gentleman I met a short time later, told how he jogs on the edge of town very early most mornings. As he ran near the local grounds when the fair was in town, he realized that as most of the town was still opening their eyes, the dairy people had to be up diligently milking their cows. Even the hog, sheep and horse owners at the fair, could sleep later. His conclusion to me, "Dairy farmers ought to get $40 a gallon for their milk!"
What did happen in 2008 and 2009? The downturn in the world economy hit the US dairy farmers quite harshly. In my book-keeping, I had concluded it actually started before that.
In my brief encounter with the man who prepares the taxes for our farm business, we discussed the economy. He clearly validated my observations when he soberly reported, "I prepare the taxes for many farmers in the area, and it has not been good for five years"!
The other gentleman I met a short time later, told how he jogs on the edge of town very early most mornings. As he ran near the local grounds when the fair was in town, he realized that as most of the town was still opening their eyes, the dairy people had to be up diligently milking their cows. Even the hog, sheep and horse owners at the fair, could sleep later. His conclusion to me, "Dairy farmers ought to get $40 a gallon for their milk!"
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