Posted: Thursday, July 01, 2010 8:00 AM
By ANNA WILLARD
Crop reports recently released by California's county agricultural commissioners show that a three-year drought and a sudden drop in milk prices in 2009 are taking their toll on dairy and forage producers.
"The economic losses have been massive for every one of these guys," Leslie Butler, Cooperative Extension specialist at University of California-Davis, said.
Tulare County's total gross production value in 2009 was down by 19 percent compared to 2008, a drop of more than $970 million. Milk and field crop prices were a big contributor to that decrease.
Milk is the county's number one commodity, and Tulare County produces more milk than any other county in California. Due to the drop in milk prices, the value of feed crops has declined as well. The value of dairy products was down 32 percent from what it was in 2008, and the value of alfalfa was cut in half from what it was in 2008.
Given the status of milk as Kings County's number one commodity, dairy producers there also experienced a sharp decline in revenue. Overall, there was a 25 percent decrease in the value of Kings County farm products, which is over $430 million less than 2008. Dairy revenue decreased by 38 percent while the value of field crops was down by 37 percent.
The effects of these losses go beyond farms, experts say. Declining values have had an impact on rural communities, as farms employ fewer workers and buy less feed and other services.
For every dollar lost from the dairy industry, a certain amount is lost in the community. It has a multiplier effect, Butler explained.
"Producers can't do a lot when you lose money at the rate the dairy industry lost it over the course of six months. It will take producers at least six years to recover from this," Butler said.
However, feed and milk prices seem like they are starting to line up, and producers are making money again.
The dairy industry, like the larger economy, is beginning to turn the corner, he said. But it could take at least another six months to year for people to get their confidence back, Butler said.