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'Awash with milk' means drop in prices
MONROE - Dairy farmers hit with hard times in the past have another tough year ahead of them with lowered milk prices, which may not rebound until fall at the earliest.

University of Wisconsin-Extension Ag Agent Mark Mayer said the global surplus is to blame for the lowered numbers.

"Certainly the cause is over-supply," Mayer said. "Most countries, and the United States, are awash with milk."

In 2014, dairy was performing strongly with the highest numbers on record at $22.57. Now, milk prices have dipped early, $3 less per 100 pounds of milk than at this time last year. In April, milk sold to produce cheese was $13.63, down from $16.19 in May 2015. This year, May milk sales are projected to be $12.75 per 100 pounds.

With local producers a more appealing price option for buyers overseas, the U.S. export of milk dropped 26 percent in March, a significant change, Mayer noted. Milk production has increased by two percent, which is also a negative step.

"Farmers are producing milk for less than it's worth," Mayer said. "Unfortunately that happens. Farmers make more milk because they have bills to pay."

The European Union dropped quotas, another reason production has increased.

John Dieckhoff, 52, has been operating Hidden Sunset Farm west of Juda for more than a decade and comes from a long line of farmers. Dieckhoff said generally it takes his farm $17 per 100 pounds of milk to cover operating expenses, but right now they are only taking in $12 per 100 pounds. He said milk prices have always had their ups and downs but have been more extreme for roughly 20 years.

"Now they're more like mountains and gorges rather than hills and valleys," Dieckhoff said. "It's a different world economy."

The U.S. Department of Agriculture predicts a difficult year for farmers. Mayer said the lower prices will most likely continue until fall of this year, if not longer. An upside, however, is the lowered prices for consumers.

"The good news is the prices at the grocery store for dairy products," Mayer said.

But it won't be significant, Dieckhoff said. Because there are fixed costs for suppliers, the number can only drop so much. The price drops have a negative impact at the local level as well.

Calvin Wasserstrass, 60, has been milking cows his entire life on a farm between Monroe and Monticello. Wasserstrass and his wife and son currently milk 70 cattle but also have jobs off the farm to keep up with expenses. He said with less income, those who look forward to purchases from farmers also suffer from lapsing income.

"We don't have money to repair any machinery, buy new machinery or any extra money to spend, like going out to eat or anything like that," Wasserstrass said. "Wherever farmers spend their money, they're not doing that. So the people who depend on farmers spending money are struggling too."

Despite the difficult time, Wasserstrass said farmers have continued as they have in previous years of hardship, by lending a hand to one another. He may have no funding to repair the hay baler the farm needs, but Wasserstrass said the family is hoping once they help their neighbor with repairs, they can borrow the functioning one as compensation.

Still, farms have to plan for the coming months of increased red numbers. Dieckhoff said as a smaller farm, Hidden Sunset can try to be energy efficient and does not have to worry about paying labor since he and his wife are the only workers. The next time there is a surplus, he said most farmers will remain as optimistic as they have in the past, paying off their debts with the extra income until the next storm comes to pass.