Dairy farmers are used to the cyclical nature of milk prices, but this month the price paid to dairy farmers is expected to drop well below the cost of producing milk in Connecticut.
Milk prices are set by the federal government. Last year they averaged a little more than $18.00 for 100 pounds of milk, but this month prices are expected to drop to about $11.00. Economist Bob Wellington of the dairy-farmer cooperative Agrimark says this is about the lowest price farmers have seen. He says it could be particularly difficult in Connecticut where it costs farmers between $18 and $ 20 dollars to produce 100 pounds of milk
“We’ve been this low a few times in past 30 years [but never at a time when milk production costs were so high and such low prices. So the combination will provide the lowest net return, in fact the lowest negative net returns probably that farmers have ever seen.”
Wellington says the price drop is due to a reduction in demand from foreign buyers. The U-S sells dried milk and whey to Asian and African countries. Wayne Kasacek from the state Department of Agriculture says this price drop could push some marginal farms in the state out of business