Posted: Thursday, May 27, 2010 5:46 PM
By CAROL RYAN DUMAS
National Milk Producers Foundation announced Thursday, May 27, that Cooperatives Working Together would open bids on another herd retirement, its 10th since operations began in summer 2003.
Bids will be taken until June 25.
Jim Tillison, CWT's chief operating officer, said the CWT committee, 54 members, makes its decisions based on regular economic analysis done by National Milk, which manages CWT.
After reviewing a number of economic benchmarks including cull rates and cull cow prices, the committee decided to add another herd retirement to the mix.
"It is our belief that a herd retirement at this time will add to the positive momentum already building and should result in speeding up the milk-price recovery already in progress," Jerry Kozak, president and CEO of National Milk, said in a press release.
Based on current markets, CWT will consider bids up to, but not to exceed, $3.75 per hundredweight. Producers whose bids are accepted are paid by CWT for their milk production value, and they also retain the beef value of the cows they send to processing. Participating producers will not have the option of offering bred heifers, as they did in 2009.
CWT has no set target for the volume of milk or the number of cows to be removed in this herd retirement round. Producers must be CWT members to bid.
Milk prices have been languishing at or below cost of production, but national milk production grew by 1.7 percent according to April figures from the National Agricultural Statistics Service.
Even though the national dairy herd decreased by 155,000 cows, it was 3,000 higher than March, and production per cow increased 63 pounds.
Of the 23 major milk-producing states, 16 of them increased production in April over year-ago levels., including Washington (7.2 percent), Wisconsin (6.2 percent), Michigan (5.1 percent), and Idaho and Minnesota (3.3 percent).
California, the largest producer at 3.43 million pounds, was up slightly from a year ago, marking its first month of gain in 17 months.
Dairymen sent 234,700 cows to slaughter in April, the highest April figure since 2003.
Tillison said CWT's objective has been to speed price recovery. Earlier this year, economic analysis showed the most effective way to do that was through exports.
Since the export assistance program was reactivated in March, CWT has helped members by paying bonuses on exports of 15,652 metric tons (34.5 million pounds) of cheddar cheese.
"Our objective in starting up the export assistance was to reduce levels of cheese inventories being built, which we felt were hanging over the market," he said.
CWT's budget in 2010 is $20 million. Some of that has already been used to pay off the 2009 herd retirement, but the majority of the budget funding is still available, he said.
CWT is being funded by dairy cooperatives and individual dairy farmers, who are contributing 10 cents per hundredweight assessment on their milk production through December.
For more information: Call 888-463-6298 or go to www.cwt.coop