milk prices are falling again, especially as eating places close and the rest of the economy dries up.
Plunging milk prices and less demand make Josh Salentine a bit uneasy.Milk prices had recovered some from their depths at the end of 2018 and in the first month of 2019. But you can see how prices have plummeted again, declining 20 percent over the last 2 months.
"So basically how it’s affecting us is the markets," he said. He’s a dairy farmer in Luxemburg.
He says farmers like himself depend on selling milk and cheese to schools and restaurants.
With both now closed, "that means no cheese, no sour cream, no fluid milk on the tables and the dairy markets have reflected that these last three days," he explained.
It's now bad enough that a state dairy organization is now encouraging its farmers to cut back on the amount of milk they are making, so prices can try to rebound.
Dairy farmers throughout Wisconsin who are members of Foremost Farms of Baraboo received a letter around March 20 from the milk processing company asking them “to voluntarily reduce your milk production to the best of your ability.”...And you thought the prospect of 20-30% unemployment was the only comparison to the 1930s.
The market uncertainty is being caused by the novel coronavirus, according to the letter.
“Due to the extreme nature of the coronavirus situation and the impact on the economy, we believe the ability to pick up and process your milk could be compromised,” states the letter signed by CEO Greg Schlafer and Board Chairman David Scheevel.
The letter tells members “now is the time to consider a little extra culling of your herds, or drying off some cows early,” and “to be prepared for scenarios that would require our members to dump milk on member farms, ship milk to digestors, or dispose of in some other manner.”
You can try to blame coronavirus for this latest hit for Wisconsin dairy farmers, but those pressures merely added to the ongoing problems of overproduction and deflated prices that are the real reason Wisconsin has led the country in farm bankruptcies in each of the last 2 years. And as the 1st quarter of 2020 begins, the danger of more farms going under may be increasing, because no one will be making ends meet if prices continue at these absurdly low levels.