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Dairy downer

Jeff Kropf

Barely noticed outside the industry, but of some real import to various places around the Northwest, especially southern and southwest Idaho: Prices for dairy products are dropping, fast.

A notable piece in the Twin Falls Times News said, “Dairy prices are about $7 below the break-even point needed for dairymen to pay operating costs – that means that the industry, in large part, is looking to bank loans to stay in operation. ‘This is as bad as we have ever seen it,’ said Rick Naerebout, an industry representative with Independent Milk Producers. ‘But what makes it worse is the uncertainty that’s ahead.’ Dairymen across the United States are feeling the pinch as demand for milk and other dairy products decline in both foreign and domestic markets.”

More specifically, to take one key example: “Milk prices peaked at $20.25 in June 2008, before dropping to $11.12 – not including protein and other solids. Dairymen need about $13.00 per hundredweight to break even with current feed prices and other operating costs.”

Factor that into regional economics, especially considering that dairy has been the biggest ag growth area in the region in recent years.

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