PRST STD U.S. POSTAGE PAID OMAHA, NE PERMIT NO. 36
Section
A
Volume VI, Issue 6
June 2012
Prices drop but dairy remains a valuable asset to state’s economy by Greg Forbes Good winter months have led to better production from dairy cows, but a surplus in milk has caused prices to drop. Iowa State Extension Dairy Specialist Leo Timms said the warm winter throughout Iowa and the United States made feed more available to farmers. As a result, cows have produced milk at a rate higher than projected, which has led to a slight surplus. Timms said demand for milk has continued to be relatively high but the indication of a surplus has driven milk prices down especially at the farm level. “Milk is like any other product,” Timms said. “If there is even the slightest surplus, the prices received by dairy farmers drop.” Lee Maassen, of Maurice, president of Western Iowa
Dairy Alliance, expects low prices to continue at least throughout the summer but said farmers should not experience any long-term losses. “Right now, farmers break even or are a little bit below the cost of production,” Maassen said. “But from a longevity standpoint, they should be okay.” In the last year, Timms said prices on the farm have dropped from nearly $18 per hundredweight to $15. Timms explained that with the falling prices of milk, higher feed costs and residual effects from the 2009 economic downturn, the number of dairy farms throughout Iowa has decreased, but the number of dairy cows has remained stable between 206,000 and 209,000. DAIRY . . . Page 4A