Something to Cheer About

Higher dairy prices will spell relief for cash-strapped dairy farmers. Compiled by staff

Published on: May 10, 2004

Consumers will soon experience sticker shock when they buy milk, butter and cheese. Prices will rise dramatically because of lower milk supplies, says Jodie Pennington, dairy specialist with the University of Arkansas Cooperative Extension Service.

While higher milk prices will take a bigger bite out of consumers' pocketbooks, "it will spell a little financial relief for dairy farmers who have been financially stressed for the last couple of years by low milk prices," Pennington says.

The extension specialist says consumers over the past couple of years have enjoyed bargain milk prices.

However, while consumers were enjoying good prices, some dairy farmers were forced out of business and other cash-strapped dairy farmers were forced to sell less productive cows. Higher cattle prices recently caused farmers to cull still more cows, which further reduced production.

Another factor in higher milk prices has been the rising cost of feed, mainly soybeans. Soybean prices have risen dramatically. Producers fed less feed and supplements, causing production to drop even more.

"In the long run, higher dairy prices will allow more producers to stay in business," Pennington says.