Vermont dairy industry stabilizes

07/19/07 12:00AM By Ross Sneyd



(Host) Vermont's dairy industry is stabilizing this summer after one of its worst years in decades.

The eleven-hundred dairy farmers around the state are being paid nearly record amounts for their milk right now.

But that comes after a year when the average farmer lost between 40-thousand and 50-thousand dollars.

Bad weather combined last year with high fuel costs and low milk prices. That forced most farmers to take on additional debt - and forced many out of business.

Prices last month hit nearly $20 for 100 pounds of milk. But the Vermont Milk Commission says that's not much more than what it costs to produce, which is averaging around $18 per hundred pounds of milk.

Bob Wellington is an economist for the Agri-Mark dairy cooperative. He says farmers welcome the higher price, but know it won't last.

(Wellington) "We're finally getting market prices that are reflecting the increasing costs. It's not a great news story. It's not like farmers can make record high profits. They're going to get record high milk prices for a relatively short period of time to cover their record high costs."

(Host) Experts point out that feed prices are still high and so are fuel prices. And it's fuel that controls so many costs on the farm.

Diane Bothfeld of the state Agriculture Agency says that means farmers are still being forced to closely manage their businesses.

(Bothfeld) "Farmers are saying, `Well, this is a good price. But, boy, my costs are up so much that isn't that bountiful as it may have looked in past years."

(Host) The current forecast calls for prices to average about $19 per hundred pounds of milk for all of this year.

Economists say if that holds up, farmers should be able to recover some of the ground they lost in 2006.
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