The price of raw milk has dropped precipitously in the past four or five months, and is almost 50 percent lower than a year ago, falling from around $19 to $10 per hundredweight. Local dairymen are feeling the pinch and are hanging on for dear life.
Dairymen question why retail milk prices remain high when wholesale prices are low. They say lower retail prices would encourage consumption and raise the demand for their product.
Klassen Dairy at Hillsboro milks 300 Holstein cows. Manager Dale Klassen has been in the business for almost 25 years and has gone through other hard times.
“The price of milk drops like a rock and it creeps up,” he said. “I’ve gone through this three times, but every valley seems a little tougher.”
He said one other time the price was lower than the current $10 per hundredweight but input costs were not as high. Fuel costs are lower than a year ago, but other costs have risen 40 to 50 percent.
Klassen Dairy raises its own feed, which helps, Klassen said. His wife, Kay, works part-time at Hillsboro Family Practice Clinic.
They hang on, hoping for better days.
“We don’t know what else to do,” Klassen said. He is encouraged by signs the price of milk is beginning to strengthen.
Lyle Hanschu operates a small Jersey dairy one mile north of Lost Springs on U.S. 56/77. He isn’t too concerned about the price of milk. He said the dairy’s survivability is based on outstanding genetics, going back to the original Jerseys from the English Channel’s Jersey Island.
The closed herd is propagated through line breeding and careful inbreeding. Hanschu said there is a demand for his cows, heifers, and calves, which he sells at a premium. That also is why he always has a small herd.
Because he is a small operator, Hanschu focuses on his 30-head herd much like the small farmers of years ago. Each of the Jerseys has a name and a decorative chain around its horns. Cows are hand-fed and watered in their stalls and kept inside during inclement winter weather.
Hanschu is a proponent of raw milk, which he says contains live enzymes and beneficial bacteria that are destroyed by processing. He uses all-natural feed products and does not use artificial hormones to boost milk production.
Recently, a couple from Washington, D.C., visited the farm to view Hanschu’s operation. They purchased as-yet-unborn calves from six cows. They told him price was not a problem. They even offered to buy a trailer for delivering the calves.
Hanschu claims his Jerseys produce milk with a high level of butterfat and protein, and therefore, he receives a premium price per hundredweight.
Expenses include $400 for hauling, a percentage cut for a dairy buy-out program that is underway, and $700 a month for feed. The buy-out program is designed to reduce the number of dairy cows by 100,000 nationwide.
Dairymen receive a subsidy when the price drops below a designated level, but Hanschu calls the subsidy “a joke,” because it is not linked to the cost of production.
Two sons, Brian and Kacey, help with the milking. Both have off-farm jobs. His wife, Carol, is a teacher in Centre USD 397.
Local dairymen are members of Dairy Farmers of America, a farm cooperative. DFA announced Friday it is distributing $9.5 million to 10,750 dairymen, to ease the economic impact of low prices.