Dairy Producers To Raise Prices, Reduce Herds

Cooperatives Working Together (CWT) has announced details of its second herd reduction program this year aimed at cutting milk production and boosting prices. CWT spokesman Jim Tillison said the organization will accept as many bids as it can get at $5.25 per hundredweight or below.

The first herd reduction this year was the largest dairy herd retirement program ever conducted, with 101,040 cows removed from production in 41 states. Those cows produced almost two billion pounds of milk.

Additionally, Ag Secretary Tom Vilsack said that the Obama Administration is taking action to support struggling dairy farmers by increasing the amount paid for dairy products through the Dairy Product Price Support Program (DPPSP). USDA estimates show that these increases, which will be in place from August 2009 through October 2009, will increase dairy farmers’ revenue by $243 million.

USDA is currently reviewing federal dairy policy to determine what changes are needed to reduce price volatility and enhance farmer profitability.