Push to stabilize dairy industry

September 5, 2012 12:00:00 AM PDT
A rise in the number of dairy closures has prompted the state ag secretary to form the California Dairy Future Task Force. The new task force aims to restructure the industry's pricing system.

Valley dairies have struggled this year because drought in the Midwest has forced feed prices to spike.

California's dairy revenue jumped 30% last year. But dairy operators like Steve Maddox of Riverdale said the cost to produce your milk has sent dozens of dairies out of business.

Dairy cows need corn in their feed for protein but drought in the Midwest caused corn prices to spike. Maddox explained, "Typically dairymen are spending between 50 and 70% of their milk checks to feed their cows, who they endear second to their kids and in the last 60-90 days it has almost been 90% of their milk check." That's before payroll and utilities.

Maddox is one of 32 people invited by State Ag Secretary Karen Ross to be part of the new dairy future task force.

The group will be made up of dairy operators, processors and co-ops. Maddox said, "What it will do is give us some consistency in our milk pricing, our regulatory milk price to be comparable with our federal pricing." Right now Maddox says state milk prices run 15% lower.

He adds 28 California dairies have declared bankruptcy since April. Most of them selling their cows to beef processors. "Obviously the task force is not going to address current difficulties brought on by the drought."

The state ag secretary expects the task force to offer its recommendations by the end of the year.


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