The hay barns are empty. That is sight that is becoming all too common on dairies these days. Milk prices have been hanging below the cost of production far too long. Dairymen are struggling to stay afloat, as they slowly watch all the equity that had been built up slip away. Future predictions say that dairymen should plan on more of the same. It looks to be another rough year ahead.
One strategy to meet the dairy crisis has been the formation of CWT, Cooperatives Working Together, which is funded by dairymen to address market fluctuations that adversely affect milk prices. CWT has sponsored several buyouts throughout these difficult months, allowing dairymen to submit bids of payment to have the organization "buyout" a producer's operation. Once a bid is accepted, the producer receives payment from CWT, and the producer promises to slaughter all milking cows and further promises not to put any milk on the market for one year. This program seemed like one that might work well for us, so Harry and I set up meetings with accountants and bankers to learn how the program would affect our business. We certainly did not want any surprises. It seemed like a plan that would work well to them too. So we sent in our bid. And we felt good about the decision.
But after a few days went by, bidder's remorse set in. The thought of all the cows going to slaughter, our workers all out of a job, the life we've known for so long coming to an end,....sigh,... I was having trouble sleeping just thinking about the possibility of our bid being accepted!
In an 11th hour decision, we pulled our bid. Do we feel good about it? Well, that depends on the day.
2 comments:
our bid was for both dairies. it would have been something, no?
i don't think that it will make much difference. not all dairymen pay into the program. if you don't pay, you can't submit a bid on the buyout. the maximum bid allowed on this buyout was not very high, and for many it would not be enough to clear up debts, so the response on this buyout was quite low. but, i think the biggest problem is the dairyman himself. in order to get more money, he thinks he needs to produce MORE milk (add more cows, inject BST, use sexed semen..)and with increased supply, the price will drop even further. it's not a popular philosophy to voice, but i think that the dairyman is his own worst enemy.
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