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Low milk prices put strain on farmers

This is shaping up as a challenging year for U.S. dairy farmers, who enjoyed record high milk prices and low feed prices last year.

WEST CHARLTON, N.Y. — In an online profile of “Our Farmers,” New York City milk bottler Elmhurst Dairy tells the story of how David Wood bought his first two calves as a part-time hobby in 1970 and grew his Saratoga County farm to more than a thousand Holsteins, whose milk is trucked every day to its plant in Queens.

At least, it used to be.

Elmhurst abruptly cut ties with Wood’s seven-farmer Mohawk Valley Cooperative and another small co-op in central New York in March, giving them 30 days to find new buyers for their milk. It couldn’t have happened at a worse time, with a nationwide glut of milk and plummeting prices.

“A lot of people are scrambling to get all their milk sold,” said Wood, who for 13 years sent milk to Elmhurst from Eildon Tweed Farm, which was founded by his wife’s Scottish ancestors in 1794 in the Saratoga County town of West Charlton. “It’s a very difficult market right now. It took a lot of work to find a market, but we now have short-term contracts with three buyers and have been selling all our milk for the past week.”

This is shaping up as a challenging year for all U.S. dairy farmers, who enjoyed record high milk prices and low feed prices last year. An increase in milk production combined with sharply lower exports and declining sales of fresh milk have combined to depress milk prices paid to farmers from a 2014 high of about $28 per hundred pounds to below $18 this spring.

Wood said he’s currently selling milk for less than it costs him to produce it.

“This issue is affecting both large and small co-ops,” said Joe Morrissey, a spokesman for the state Department of Agriculture and Markets. But small groups are finding fewer outlets for their milk than they had in the past.

Wood’s small cooperative is something more typical in the Northeast than elsewhere, said Andrew Novakovic, a professor of agricultural economics at Cornell University.

Most milk is marketed through large national or regional cooperatives, but in the Northeast, small groups of farmers have been able to negotiate premium prices by guaranteeing a processor one to three 75,000-gallon tankers a day of high-quality milk.

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