At Harold Howrigan’s dairy farms in northern Vermont last year, the red ink was flowing almost as fast as the milk. The dairyman was losing nearly $100 per cow each month because the price for 100 pounds of milk fell to $11, well under the $18 cost of production.
“It was bad. People had to borrow money just to make ends meet,” says Howrigan. Prices have recovered some, though not enough to pay down the new debt, he says.
These are tough times for America’s 60,000-odd dairy farms, thanks to a decade-long deflationary trend in prices and a particularly severe downturn last year, Bloomberg Businessweek reports in its May 31 issue. Industry sales fell 30 percent in 2009, to $24.1 billion, from the year-earlier period, according to the Agriculture Department.
Congress, which spent $350 million on emergency dairy price supports last year, has taken notice. So has the Justice Department, which is scrutinizing the market power of the biggest dairy cooperatives and food companies to assess the effect on prices.
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