Dairy prices have continued to decline for the last two years, rivaling any other decrease in recent history according to a new University of Kentucky economic policy update.
UK Livestock Economist Kenny Burdine says the usual suspects have affected the industry: increased production, decreased export levels and a strong U.S. dollar. Burdine says the record lows have motivated the USDA to extend the Dairy Margin Protection Program sign-up deadline to December 16th,
“It offers the chance to guarantee an estimated return milk over feed cost,” Burdine said.
Utilizing U.S. mill milk prices U.S. corn, alfalfa and soybean mill prices allows the MPP "to kind of estimate a dairy ration, and it guarantees that certain producers can receive a certain return above that using that fixed ration for the program," said Burdine.
October 2016 Economic and Policy Update by Robbie Canning on Scribd
The USDA paid approximately $11.2 million dollars in financial assistance to American dairy producers enrolled in the 2016 MPP- Program. The payment rate for May/June 2016 will be the largest since the program began in 2014. Burdine says in 1980 there were about 250,000 dairy cows in Kentucky, now there are less than 60,000. If the market continues to decline, he believes more producers will be forced to shut their doors.
