Dairy farmer talks prices

Published 3:45 am Wednesday, June 20, 2007

By By Adrienne McKenzie
Rising gas prices? Rising cost of feed?
One would think these increases would be the reason milk prices are rising, but according to Boyd Sigafoose, China is to blame for the sticker shock.
Sigafoose has a dairy farm in Bratt, Fla., and he said that the reason milk is so pricey is because China, along with other third world countries, are starting to drink an enormous amount of milk per day, creating a greater demand for the dairy product.
"The driving force of milk prices is China," Sigafoose said. "China is driving the milk market. They've implemented that 450 million people start drinking a pint of milk everyday. Powdered milk is going to China as fast as they can export it. It's not only China, it's all the third world countries with oil. They now have money and they want good food. Third world countries are buying all the powdered milk they can get."
According to the Southeast United Dairy Industry Association (SUDIA) United States' dairy exports are reaching record levels.
With the third world countries buying so much powdered milk, which is a powder made from dried milk solids, the demand is high for the product. And, another reason milk prices are so high in the United States, according to Sigafoose, is because of a drought in New Zealand, another exporter of powdered milk.
"New Zealand normally exports a lot of powder," Sigafoose said. "They have had a drought for two years and now are just trying to save their cows. That's another driving force for the prices rising."
Not only are exports rising, but people in the U.S. are chugging down milk and eating other dairy products rapidly as well.
Fast food restaurants, such as McDonalds and Wendy's, have begun serving milk, which has caused milk sales to rise.
"As we put more of the products that consumers want where they want them, we're finding that milk sales continue to grow," Eric McClain, manager of industry relations for SUDIA, said in a press release.
Even though there is an increase in consumption, there has been a decrease in dairy farmers. The number of dairy farmers has decreased drastically since Sigafoose became a farmer in 1953.
"There used to be 108 dairy farmers in this area, now there are only three," he said. "It's been so hard and profit margins have been so low that nobody wants to do it seven days a week."
Sigafoose said he has seen milk prices as high as $4.99 a gallon and that there is not any chance of the prices decreasing any time soon.
"Prices will not go down until the demand starts letting up in the Middle East," he said.
Sigafoose said the rising costs of milk are not due to what the everyday assumption is, it is all because of exports.
"Instead of fuel prices and feed prices, it is exports," Sigafoose said.

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