To the hard-working dairy farmers who get up before dawn every day so that the rest of us can enjoy wholesome, healthy milk on our cereal and in our morning coffees, “Please sell your cows!”
At first, I know that may be a hard pill to swallow. Dairy farming for many is more than just a job. It’s a way of life. The thought of not being able to help feed the world would make many of you sick. But you see as an industry we are currently producing so much of the good stuff that we are killing the industry for producers everywhere.
Every day we see headlines in the news about record low milk prices. Prices considerably below fair market rates and in many cases the cost of production. Producers around the world have taken to the streets to protest. However, none of us en mass have done the number one thing that will help solve this problem. “Stop producing more milk than there is demand for.”
I am definitely not an economic expert, but I do remember a little from my courses in university. The main message I retained is that “When supply is greater than demand, the price goes down.”
Sure there is the fact that many processors are making record profits. Trust me that makes me outraged at a time when there are producers that have gotten so desperate that they have taken their lives. However, as an industry, we have given the processers this power. Because we continue to produce more of the silky good stuff, and the processors, have been able to drive the price the average producer receives way down.
Now let’s not deny that there are many great reasons that we are producing more milk than ever: An increased rate of genetic improvement (Read more: The Genomic Advancement Race – The Battle for Genetic Supremacy), the fact that sexed semen has lead to a greater number of females (Read more: Sexed Semen from Cool Technology to Smart Business Decision) or that our understanding of nutrition and environment have made significant advances over recent years (Read more: Dairy Herd Managment) All of these progressive improvements have contributing to this debilitating situation.
However, the fact remains that, unless we start producing less milk, we are going to continue this bad situation. If we don’t start to produce less milk, the choice will not be ours to make. You see as we continue to over-produce, farm gate prices are only going to go lower or, at best, remain at the current record lows. This will lead to more producers going deeper in debt to the bankers, and in some extreme cases, cause more producers to consider the drastic measure of suicide.
We have the power to right this situation. Look at the oil industry. When gas prices get too low, the major powers simply just produce less crude. It’s not that they can’t produce more. They understand how to maximize their revenues and when prices get too low, they simply produce less. Prices increase and then they start to increase production again. It’s a simple solution to a major problem.
Many of you will say, “Well if I produce less my neighbor is just going to produce more.” Moreover, that’s true. But unless we, as a group, start to work together, the processors will continue to have control over us, and we will always be in a poor situation.
So while I know it sounds harsh to decrease production at a time when the world’s population is growing, the simple fact remains that rate of consumption is not as high as the level we have increased production to. Until we change this situation, we are only going to see this situation get worse. So I ask you….no we plead with you…please sell off some of your cows, maybe feed them a less potent ration. Maybe even use some less productive genetics, but whatever you do, please start producing less milk. United we stand, Divided we fall.
Sincerely,
Andrew Hunt
Founder – The Bullvine
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