Will the increase in milk prices to dairy farmers be maintained?
The question that many dairy farmers are asking is “will the increase in the price we are getting be maintained?” I am sure that the majority of dairy farmers will say that if we are going to survive, the prices must be maintained.
Dairy farmers have been caught up in the same cost price squeeze that almost everyone else in the United States is caught up in. Before the statistical price paid to dairy farmers for milk produced in April was announced as $26.06 CWT, we had estimated the price to be around $26 CWT.
This meant that the price paid to dairy farmers has increased $3.32 CWT since January. The Class I price has been announced for milk produced in May as $28.70. That is $1.07 over April. This means that the price paid to dairy farmers will increase in May – unless the manufactured price for dairy products in Class II, III and IV declines. But no one will know what the price for Class II, III and IV will be until early in June. What a crazy way to price milk – after it’s purchased from the dairy farmers!
A gallon of milk at a store in Black Walnut, Wyoming County, is currently selling at $4.85. Remember that in Pennsylvania the Milk Marketing Board establishes the minimum price that milk can be sold for. Stores can sell it at a higher price, but nothing lower.
The sad thing is, even with these higher milk prices paid to dairy farmers, we don’t know if they will be enough to cover their increased costs of production. I would say no. The cost of fertilizer has gone up 300% since 2021; fuel to operate machinery is up over 55%; seed is up over 2021 prices by 15%-20%.
It is time for the U.S. Department of Agriculture to have a more current formula in developing the dairy farmers’ costs of production. Dairy farmers have been waiting long enough for a realistic pricing formula. Now is the time to develop one.
There is some indication that prices may start decreasing by June. This must not happen. The U.S. Congress and the USDA can and must develop a floor price paid to the dairy farmers.
Listen! Talk to the dairy farmers. They will tell you what they need for a price. Failure to start a new milk pricing formula will only mean hundreds of dairy farmers will be forced out of business.
Remember the old days. We had parity pricing until October, 1981. Since that time, Congress intervened and kept lowering the value of the support price. Consequently they eliminated it without any substitute for parity pricing. This is the main reason why a majority of dairy farmers have been forced out of business.
Now is the time to do something different.
Arden Tewksbury is the manager of the Progressive Argiculture Organization, headquartered in Meshoppen.