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Volatile milk prices squeeze Missouri dairies

August 13, 2009 | 12:01 a.m. CDT
The average price dairy farmers were paid for 100 pounds (approximately 11.6 gallons) of milk has dropped sharply after hitting record highs in recent years, imperiling Missouri dairies and triggering federal Milk Income Loss Contract payments. MILC payments are distributed when benchmark prices drop below a certain level and cover 2,985,000 pounds of milk, or the production of about 130 average cows. With an average herd size of 63 cows as of 2008, the vast majority of Missouri’s 1,760 dairy operators receive the MILC subsidy for all the milk they produce. The U.S. Department of Agriculture has also responded to plunging prices by taking the highly unusual step of setting a federal support price for some cheese and dry milk.

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