Milk glut squeezes farmers, buyers

By The Associated Press Published: May 26, 2009
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BARNHART, Mo. — A collapse in milk prices has wiped away the profits of dairy farmers, driving many out of business while forcing others to slaughter their herds or dump milk on the ground in protest.

But nine months after prices began tumbling on the farm, consumers aren’t seeing the full benefits of the crash at the checkout counter.

The average price for a gallon of milk at grocery stores last month was down just 19 percent from its peak of $3.83 in July.

Farmers, on the other hand, got $1.04 a gallon in April — 35 percent less than they were paid last fall. This winter, wholesale prices were down as much as 45 percent.

Price disparities are a fact of life both for farmers and anyone who shops at a supermarket, but the nature of milk — how it’s stored, priced and sold around the world — makes the gap all the more dramatic.

Today, frustrations are spilling over as the price crash creates widely divergent fortunes within the milk industry, boosting profits for the middlemen like dairy processors while pushing farmers to the edge of bankruptcy.

Darrell Kraus, a dairyman in Barnhart, spends almost as much today on hay and other supplies for his herd of 160 cows as he did a year ago, but he’s getting paid less for a gallon of milk than his father received in the 1970s.


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