Vermont dairy farmers are getting record high prices for their milk. According the USDA, farmers are receiving a minimum of $23.57 per hundredweight. By comparison, in 2009 prices dipped under $12, which is far below the cost of production.
Diane Bothfeld is deputy secretary for dairy policy at the Vermont Agency of Agriculture. She says the current price is the highest ever, based on records dating back to 1977.
Bothfeld says there’s been increased demand for dairy products, especially from overseas. She says the higher prices are also due to flat U.S. milk production largely because of drought conditions in the West and Midwest.
“California, the far West can usually crank production up quickly. But there’s not a lot of feed available and what is [available] is extremely expensive," says Bothfeld. "Things will change. The Midwest got a lot of snow this winter, the drought conditions should be alleviated. Milk prices go up, production increases and milk prices go down.”
Bothfeld says the number of dairy farms in Vermont continues to decline. Currently there are 889, but in the first three months of this year, Vermont lost 40 dairy farms. Bothfeld says despite the decline, total milk production stays fairly constant.
She says higher milk prices will allow farmers to catch up on debt, but it could also provide a reason for more to get out of the business.
“In the bad year of 2009 when milk prices were very low, people incurred a lot of debt," she says. "The ability to catch up, pay off those debts ... Some farmers who are waiting or hoping to get out the business may take that opportunity now.”
Bothfeld says milk prices are expected to stay strong for the remainder of the year.