The dairy industry in California has been snowed under by problems during the last few years. Despite being the country's biggest dairy state and bringing in good revenue, the state's dairy farmers are facing bankruptcy, with several dairy farms already shut down.
According to The Associated Press, the sad state of California's dairies is the result of high costs of animal feed and low pricing of milk in the state. The two factors together have been forcing dairy farmers to file for bankruptcy. Many of them owe banks millions of dollars with no way to pay them.
Animal feed has been exorbitantly high these past few months, thanks to the drought in the Midwestern farm belt. As predicted in the last few months, lower output of corn and soybean has farmers struggling to feed their herd. Many have resorted to slaughtering and selling their herd. Consequently, milk production is on the down-low, reports AP. Moreover, the increase in the number of cattle in the market has led to a decline in the price of cows.
Milk in California is priced lower than in the other states of the U.S. The dairy industry in California is not under the control of the federal government, as in other states, but under the control of the California Food and Drug Administration (CFDA). Over the last few years, the CFDA has set the prices lower than ideal.
"I have been in this business for 57 years and I have never been in financial trouble like I am right now," said Mary Cameron, who runs the Atsma-Cameron Dairy with her two sons, reports AP. "I'm on the verge of bankruptcy. It's horrible and inexcusable."
According to AP, the price of milk used for producing cheese in 2011-2012 has been $2 or lower per hundredweight of milk. Steve Lyle, spokesman for the CFDA, claims that the higher supply than demand is responsible for the low pricing, AP adds. Many farmers have petitioned the federal and state government to raise the price paid to them by the cheese makers and processors. Consumers will not be affected by any difference in the price paid to the farmers.
Farmers have also been urging Tom Vilsack, the Agriculture Minister, to intervene and help them out. Unfortunately, he has declined to raise the price.
But, farmers still hope that the CFDA will have a change of heart and raise the price of milk in the state.
