Dairy Industry Needs to Remember 2009


2/17/2011 12:18 PM

If there is one marked difference in the dairy industry this year compared with 2009 and 2010, it is that milk prices have been making a much-needed climb out of the basement. For more than 18 months, the average dairy producer in Pennsylvania struggled to break. At last week’s Dairy Industry Advisory Committee meeting, Bob Schupper stressed that the dairy industry cannot forget the heartbreak of those difficult times. He feared the price recovery would reduce the urgency to address the shortfalls of dairy policy.

A draft of the 24-point recommendation set for passage by the committee in March reiterated many of the challenges in dairy farm profitability and presented a history lesson of sorts on how milk pricing has changed through the years. It showed how dairy prices have become more volatile since the 1990s. It also documented the weakened states of many dairy farms -- their balance sheets, farm equity and cash reserves in tatters.

Now, with milk prices on the rise, the panic surrounding the dairy industry has calmed. But the question Schupper raises is a good one. History shows that when prices make dramatic slides, farmers rise up in outrage. However, as prices recover, the momentum to “fix the milk price system” dissipates.

Now that milk prices are almost $19 per hundredweight, the question is whether dairy farmers will continue to press forward for change or be lulled into complacency by the recovery?

--Charlene Shupp Espenshade, Special Sections Editor



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