ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, May 9, 1996 TAG: 9605090056
SECTION: BUSINESS PAGE: 8 EDITION: METRO
SOURCE: By GREG EDWARDS STAFF WRITER
Virginia consumers probably will pay 20 to 30 cents more per gallon for milk this summer because of an effort to help Southeast dairy farmers who have been devastated by poor business conditions, dairy industry spokesmen say.
Milk prices at the farm have not risen for at least a decade, but costs of farming have continued to climb - including a 60 percent increase in the past year in the cost of feed for cows. That situation has spurred dairy farmers to demand that the cooperatives to which they sell their milk provide relief in the form of higher farm prices for milk, according to Michael Myatt, manager of the Cooperative Milk Producers Association in Blackstone.
The cooperatives will begin paying farmers a "feed surcharge" of $1 per hundred pounds of milk, Myatt said. One hundred pounds equals 12.5 gallons of milk.
The increase - effective June 1 - still won't cover the farmers' increased feed costs, said Myatt, who counts about 30 Franklin County farmers among his producers.
But the cooperatives have to be careful, Myatt said, not to increase the price of milk so much that it becomes attractive for bottlers to buy from producers outside the region. It's the competition from outside that has helped hold down the price of milk, Myatt said.
He said four farmers from whom he bought milk have quit the dairy business this year.
The current price being paid to Virginia farmers for milk is a little more than $14 per hundredweight, about what it has been throughout the decade, according to State Agricultural Statistician Bob Bass.
The number of Virginia dairy farms declined to 2,200 last year from 4,000 in 1989, Bass said. In the Southeast, dairy-farm numbers have dropped from 27,000 to 16,000 in the past five years.
If farmers don't get more money for their milk, the region's dairy industry will continue its decline, according to John Collins, a spokesman for Mid-America Dairymen, a large marketing cooperative. If consumers don't support the region's farmers, they will end up paying more in the long run for milk produced outside the region, he said.
The cost for new people getting into dairy farming is prohibitive, and that seems to make the loss of existing farmers even more significant.
William Vinson, head of Virginia Tech's Dairy Science department, estimated it would take $1 million for a young person to start a dairy farm with a 100-cow herd. People are either inheriting farms or are working their way into the business over several years, he said.
With conditions what they are, the only way for a dairy farmer to stay in business is to sell more and more milk, Vinson said. The reason prices stay low, he said, is that some producers have a much greater ability than others to sell for a low price.
The price of milk must increase, and most consumers will understand, said John Miller, executive secretary of the Virginia State Dairymen's Association.
"Most consumers prefer to see their milk produced in Virginia rather than in Wisconsin, New Mexico or Texas," he said.
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