When Milk Prices Shrink Dairy Herds do Too
Truth is there isn't too much cuteness in the dairy industry these days. In Washington State there are clean water issues, smells, flies and angry neighbor issues as well as severe weather losses. Bad weather in February took a heavy toll. More than 1,800 dairy cows died in a blizzard in the lower Yakima Valley...that will cost the dairy an estimated $4 million, not including the lost production. Then there is the national price picture.
United Press International reports that the U.S. Department of Agriculture says between July 2018 and July 2019, the U.S. dairy herd shrunk to 9.3 million animals from 9.4 million.
Last year, some 2,500 dairies went out of business, largely driven by low milk prices since 2015. The prices are so low that the average dairy farmer has been losing money every year for fours years.
The issue is that 2014 was a great year for milk sales, which means farmers then beefed up production, flooding the market with milk, which sent prices crashing. As farmers have now lowered their costs, and therefore output, the price of milk is finally starting to increase.
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