Equity Gone

Conventional experts are fond of citing loss of exports in pounds. However, it is not pounds it is dollars which have American dairy farmers in a bind. So, lets look at some dollar figures.

To make up for the dollar loss in NFDM exports, only $0.67 per hundredweight out of farm milk price might have been justified from January through May2009. Instead an additional $6.04 per hundred was plundered from farm milk checks. From a farm point of view, the milk should have been poured down a hole instead of selling NFDM to the government.

But, the processors, including processing co-ops have have all the power and sucked in almost a billion dollars extra a month from farm milk checks. It is like an ATM machine. Altogether, $4,872,753,200 extra dollars was removed, January through May 2009, from American dairy farms.

This is not the end of this tale. Equity losses for dairy farms have been staggering. In the past year or so, milk cow and heifer prices have plummeted. Farmers have lost $16,767,000,000 in equity on livestock.

We cannot even begin to calculate the real estate losses or the accounts payable.

If a farm in good shape now were to sell out, the taxes would eat up most everything. There has never, in anyone’s memory, been a time like this. Banks have closed their doors to dairy farmers in large part because the is no equity left and no one can promise a relief in farm milk prices soon enough.