The Associated Press | October 14, 2002 Mike Mahoney worked for 20 years at jobs he really didn't like to save money for a down payment on a 70-acre dairy farm just north of Nashua in northeast Iowa.
Today, he has a 100-cow herd of Holstein and Jerseys. But his efforts are facing tough economic times as dairy prices fall to 24-year lows. "If prices continue (like this) for another year, we'll have to re-evaluate our future," said Mahoney, 45.
After the Sept. 11 attacks, government reports said pizza sales and cheese use stagnated. Increased production and slumping demand pulled milk prices down.
Profits earlier in the year gave way to prices averaging $10.50 to $11 per hundredweight last month, said Iowa State Extension dairy specialist Robert Tigner. Break even for most dairies is $12 per hundredweight, dairy experts said.
"It doesn't look like there will be a turnaround any time soon," Tigner said. "People are still not going out as much, traveling as much. Italian-style cheese is responsible for 70 percent of the increase in milk consumption since the late 1970s. When that weakens, we'll see declines in milk prices."
The U.S. Department of Agriculture's report in August showed milk production nationwide increased 3.8 percent compared to August 2001. Stocks of butter and some cheese in cold storage increased. Commercial butter stocks were 12.5 billion pounds, 1.6 billion above the previous record.
Mahoney and other dairy farmers are fighting back. They're cutting back on outside labor, repair and veterinary bills. They're also examining feed rations and techniques to trim waste.
Mahoney said he's treating his animals himself when he can and he's trying to increase milk production by rotating pastures more frequently, giving cows higher quality food without increasing feed costs.
Tigner expects prices will rebound by next October. Low prices will drive some out of the business and cow numbers to drop, easing production, he said.
Don Mueterthies, who milks 220 Holsteins near Lawler in northeast Iowa with his brother, said they received $10.32 per hundredweight in their last milk check, including premiums.
"We're losing money every day. There are quite a few (dairy farmers) in the area thinking about quitting," Mueterthies said. "We're in it for the long haul."The Associated Press:
