Sat, Sep 06 2008
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Published July 15, 2008 12:33 am - PURDY, Mo. — Milk may do a body good, but milk producers say it’s not working for them right now. They say they are not getting rich from the rising prices consumers pay for a gallon of milk and other dairy products at the store. Got milk cows? By Mike Surbrugg
msurbrugg@joplinglobe.com PURDY, Mo. — Milk may do a body good, but milk producers say it’s not working for them right now. They say they are not getting rich from the rising prices consumers pay for a gallon of milk and other dairy products at the store. Milk last week ran $3.60 per gallon in Joplin. A survey in June by the U.S. Department of Agriculture found prices for 2 percent milk ranged from a high of $4.28 per gallon in Miami to $2.91 in Cincinnati. According to the USDA, dairy prices in May were up 11 percent from the May 2007 level; milk prices were up 10 percent; cheese prices were up 14 percent; and ice cream and related products were up 6 percent. Larry Purdom, a Purdy dairyman who serves on various national and state boards and is chairman of the Missouri Dairy Association, said milking cows right now is a “pretty tough” business. “The overall economics are really, really difficult right now for anyone involved in livestock production,” added Chris Galen, spokesman for the National Milk Producers Federation. Twenty years ago, the average dairy producer saw 50 percent of the retail price consumers paid for all dairy products going back to their farm, according to Galen. Today, it is about 30 percent, although food milk producers still get about half that price while others, who produce milk for products such as ice cream and yogurt, get less. The price to producers is at about $20 per hundredweight, which is 100 pounds of milk, or 11.6 gallons. That price is set by the federal government and adjusted monthly based on supply and demand and it is the minimum price the processor must pay the dairy farmer, Galen said. That means that milk producers, getting $20 per hundredweight under federal pricing structures, get about $1.72 of that $3.60 per gallon. “The others in the distribution chain, which includes processors and retailers, tend to split the other 50 percent of the price,” Galen said. ‘Survival price’ “Two years ago I would have thought that would be fantastic,” Purdom said of the $20 payment. But two years ago, fuel, feed and fertilizer prices were much lower. Now, he sees $20 per hundredweight as a “survival” price. Purdom said he recently paid $750 a ton for potash to apply on land to grow alfalfa. It was about half that cost a year ago, he said. Dairy producers also pay a fuel surcharge of 80 cents for every hundred pounds of milk hauled from their farms. That is double from a year ago. Purdom said his hauling costs have increased from about $1,300 a month to more than $2,000 with diesel prices. His cost for diesel fuel used in farm equipment has jumped from about $1,550 a load to $4,000. 
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