A Michigan dairy farmer has auctioned off his herd of 230 cows after he was unable to absorb losses brought by the state’s oversupply of milk.
Daybreak Dairy in Ottawa County shuttered after dairy farmer Nate Elzinga, 32, and his family couldn’t keep up with maintenance costs for their herd, the Grand Rapids Press reported.
“We just aren’t getting paid enough for our milk,” Elzinga said. “It’s supply and demand.”
Elzinga said his herd is now considered small by industry standards. The farm could no longer compete with larger operations.
The state’s milk production has spiked in recent years, with 428,000 cows producing 871 million pounds of milk in February, according to the National Agricultural Statistics Service.
Michigan’s herd is growing faster than the demand because of the state’s temperate climate and abundance of water and pastures. Cows are also producing more milk due to improved genetics and nutrition programs.
The root of the problem lies in the relatively low prices Michigan farmers make for their milk, said David Bennett, a ring manager for United Producers Inc., which helped Elzinga auction his herd.
Michigan farmers make between $1 and $2 less per hundred pounds of milk than farmers in other parts of the Midwest.
Milk must be shipped and processed within hours because it’s a highly perishable product. Distributors take the lowest prices.
Some farmers dump their milk instead of absorbing the extra cost of shipping it to processors outside Michigan, Bennett said.
Out-of-state processors are also moving into Michigan to take advantage of the oversupply.
“It’s tough right now,” said Roger Headley, a dairy farmer who attended Elzinga’s auction. “You don’t make enough to pay the bills.”
Source: Detroit Free Press