Official: Milk price $2 a hundredweight below break-even
BOISE, Idaho (AP) -- An official with the Idaho Dairymen's Association says low prices for milk in 2009 have made it difficult for the state's producers.
This year "is probably one of the worst years on record as far as the amount of equity dairymen have gone through to get through the year," Bob Naerebout, executive director of the association, told the Idaho State Journal.
He said dairy producers need to make about $16 per hundredweight to break even, but prices are currently just below $14 per hundredweight. He said a month ago it was below $10.
"It's still a little below the break-even point, but it's certainly better than being $6 below break-even," Naerebout said.
The low prices have forced some producers out of the business. There were more than 600 dairy operations in the state at the start of the year, but that has fallen to 585.
"Dairymen are definitely hurting this year," said Cheri Storey, communications director for the United Dairymen of Idaho. "It's been a really hard year for them."
Storey said the cost to produce milk typically goes down when the price of milk falls, but not this year.
"The reverse has happened," Naerebout said. "Input costs in 2009 went up."
But he said 2010 is looking better due to tightening supply and that prices have started to rise.
Next year "is looking like it's going to be considerably better than 2009," he said.
In 2008, dairy cash receipts totaled $2.1 billion in Idaho, accounting for 32.7 percent of the state's total agriculture cash receipts. Nearly 23,000 workers are employed in Idaho's dairy industry, and the state usually ranks third or fourth in the nation for milk production.
The state's 532,000 cows produce more than 12 billion gallons of milk annually.
Most is used for cheese, producing about 770 million pounds each year.