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Marketplace Morning Report

Dairy farmers face shrinking paychecks

Marketplace Staff Sep 18, 2009
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Bill Radke: An over supply of milk and a drop in international demand have sent prices paid to farmers to their lowest levels in 30 years. Farmers blame some of their problems on a lack of competition in the wholesale industry, and they’ve asked the U.S. Justice Department to investigate anti-trust allegations. Tomorrow, the Senate Judiciary Committee looks at the complaints with a hearing in Vermont. From Vermont Public Radio, John Dillon reports:


John Dillon: Over the last year, dairy farmers’ paychecks have shrunk nearly in half. They’re paid about $11 for 100 pounds of milk.

But Dave Montagne said it costs him about $18 in feed, fuel and labor to produce that much. The Vermont farmer figures he’s losing at least 100 bucks a month on each of his thousand cows.

Dave Montage: Our size farm, it’ll be minus a million bucks for the year.

Many farmers and their allies in Washington blame the low prices on a lack of competition among milk buyers. There are just a handful of dominant milk companies in the country buying milk from tens of thousands of farms.

Vermont Senator Bernie Sanders has asked the Justice Department to investigate Dean Foods, the nation’s largest milk company. Sanders says the Dallas-based company controls 70 percent of the milk market in New England.

Bernie Sanders: So while farmers’ prices are at a 30-year low, Dean Foods is seeing a huge increase in their profits. And we think those two issues are not unrelated.

Dean Foods says the federal government, through price supports, has a big role in what farmers are paid. And the company says the simple law of supply and demand is what’s behind the plummeting milk prices right now.

For Marketplace, I’m John Dillon in Montpelier, Vermont.

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