The dairy industry’s self-help program, Cooperatives Working Together, announced Wednesday that it has tentatively accepted 388 bids representing 102,898 cows and 2 billion pounds of milk production capacity. CWT officials will now begin the task of culling or “retiring” that many cows from the nation’s dairy herd.
It is the first in a series of herd retirements planned over the next 12 months. The number of cows and pounds of milk represent the largest single herd retirement carried out in the six-year history of CWT.
Dairy farmers in 41 states submitted a total of 538 herd-retirement bids by the May 1 deadline. The 388 bids tentatively accepted represent 72 percent of the total bids received by CWT. The number of cows now scheduled to be removed account for 64 percent of the total number of cows offered, and the 2 billion pounds of milk account for 67 percent of the milk production offered.
“The high percentage of bids CWT selected this time around is an indication that producers understood that CWT would only be able to accept reasonable bids per hundred pounds of milk in order to adjust the nation’s dairy herd and better align supply and demand,” said Jerry Kozak, president and CEO of the National Milk Producers Federation, which administers CWT.
Starting next week, CWT field auditors will begin visiting the 388 farms whose bids were accepted, checking their milk-production records, inspecting their herds and tagging each cow for processing. All farms should be audited by early July, and cows should begin moving off dairies by late May. All bidders will be notified no later than June 12 as to whether their bid was among those accepted.
“The bids selected ranged from farms with fewer than 50 cows to dairies with over 5,000, demonstrating that farms of all sizes in all areas are facing a very difficult year in 2009,” Kozak said. “Those that took advantage of CWT’s offer to retire their herds will aid others still wanting to farm by reducing the amount of milk coming to market and strengthening prices going forward.”
“CWT, thanks to the commitment of 36 cooperative members and over 500 individual dairy farmer members, has the resources to carry out additional herd retirements in the coming months. That is why CWT will not announce the average level of the bids accepted until all the herd retirements are completed,” Kozak noted. “We will continue to monitor key economic indicators in order to determine the right time to implement the next herd retirement.”
Since 2003, CWT has been responsible for culling 285,717 cows through its herd-retirement program. It has also provided export assistance.
Its efforts have been made more imperative in recent months, due to the low milk prices received by dairy producers. Officials hope that removing thousands of cows will help bring supply and demand into better balance.