Milk prices down, but farmers add to herd

The Associated Press
Saturday April 28, 2001

MODESTO — California’s dairymen continued adding cows to their herds last year, but the increased production led to slumping prices. 

A sharp drop in prices, fueled by the added production, drove down the value of California’s top agricultural commodity to $3.7 billion. 

That was about a 10 percent drop from $4.09 billion in 1999 and the second straight year that revenue fell, according to the U.S. Department of Agriculture. 

California dairies had record revenue of $4.29 billion in 1998. 

“I don’t think many dairymen are surprised by this, because we knew herds were growing,” said Merced dairyman Manny Vierra, who milks 610 Holsteins. 

The state’s dairies produced plenty of milk even while prices fell last year, as production jumped 6 percent to 33.24 billion pounds. That continued a steady increase and strengthened California’s position as the nation’s leading milk producer. 

Runner-up Wisconsin, which lost the top spot in 1993, produced 23.25 billion pounds of milk last year. 

The price that dairies receive is based on the market prices for the commodities made from milk: butter, powder and cheese. 

“Demand for dairy products continues to grow, however, so that’s a positive,” said Michael Marsh, chief executive officer of Modesto-based Western United Dairymen, which represents 1,100 of the state’s 2,000 dairies. 

Another positive for dairies is that feed prices remain low, the result of excess corn, soybeans and other grains in the Midwest.