Rising costs hit Maine's dairy farmers
Maine dairy farmers are falling on hard times due to high grain prices, bad weather and rising fuel costs.
The Bangor Daily News reported that the yearly $570 million Maine industry is feeling the impacts of a drought throughout the Midwest that is boosting the price of feed. Dale Cole, president of the Maine Dairy Association's board and a farmer with 90 to 100 cows in Sidney, told the paper that his monthly purchase of 38 tons of feed is costing about $3,000 more than last year.
A state program helps farmers in times of low prices, the paper reported, but the state's 2003 Maine Dairy Stabilization Act — or the Tier program — doesn't account for rising feed prices. Richard Kersbergen, of the University of Maine Cooperative Extension, told the paper that grain prices typically make up one third of a typical dairy farm's overhead costs.
Maine's 307 dairy farms produced nearly 51 million pounds of milk in August and have an annual economic impact of $570 million, Julie-Marie Bickford, executive director of the Maine Dairy Industry Association, told the BDN.
Bickford said the hard times also throws light on the price-setting model for dairy products, which she said has its origin on the Chicago Mercantile Exchange, creating a speculative pricing system that she said doesn't take into account local market factors.
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