Unless raw milk prices improve to keep pace with production costs, an estimated 4,000 dairy farmers nationwide will be forced out of the business, a University of Wisconsin study predicts.
Concern about the future of the dairy industry isn't limited to university scholars. Utah farmers fear that unless Congress adopts a new support price for the commodity many family farmers will give up on the dairy business."This is the worst year I can ever remember," said W. Lee Reese, a Benson dairy farmer and president of the Utah-Idaho Farmers Union.
Raw milk prices at the farm level have plummeted 30 to 40 percent during the past year, but farmers have recently experienced some price increases. But Reese says if farmers experience another down year, a number of Utah farmers - particularly those carrying debt - face bankruptcy.
"These are the lowest prices in 13 years," said dairy lobbyist Cheryl Cook.
The farmers say their salvation rests with Congress, which has six to eight weeks to act on a pair of dairy bills before the fall recess. Both are still in committee.
The National Farmers Union supports a "two tier" program that works this way: A farmer with 50 cows produces 750,000 pounds of milk. The government would assign him a base quota for production, a limit on what he could sell at or above the support price. The support price, now at $10.10 per hundredweight, would be increased to at least $12.60.
In the second tier of the program, the farmer could sell his remaining milk below the support price.
Advocates say dairy farmers have been hard hit by a combination of factors - increased production costs, drought and low raw milk prices. Thousands of farmers nationwide have gone out of dairy business, selling their cattle as beef, a phenomenon that skews the beef market.
But the U.S. Department of Agriculture has recommended that Congress leave the existing support structure in place. Raising the support price would affect the school lunch budget.
Proponents of the proposed legislation say the milk market will eventually right itself.