Friday, January 16, 2009

This is not a problem. This is an opportunity.

Did you read that American dairy farmers are complaining about not having enough customers for their product, and might find relief in the stimulus package? Apparently they are producing so much milk that it is driving the prices down.

Intersting. Especially since it was just in the summer of 2007 that prices, especially for organic milk were very high and farmers were trying to produce more.

Maybe dairy farmers should consider the following:

I am not a farmer but here are some things I think I wold consider if I was a dairy farmer:

1. Convert to all organic right now. Organic milk in the SF Bay Area goes for $6 (Horizon) to $8 (Strauss Family) per gallon.

2. Dairy farmers already know how to raise healthy cattle, maybe they should diversify into beef production; raise angus steers along side those Jersey cows.

3. Cheese making. Non-organic partially skim (meaning the fat was sold separately) gruyere commands a price of $13 per pound. Any milk the farmer doesn't want to sale at a low price he can turn into cheese and sell at a later date.

4. Organic pork. This won't work unless the dairy operation is organic, but once it is the farmer can diversify into organic pork. Why organic pork? Because there is no way a dairy farmer can compete against industrial pig farms in the non-organic sector. But in the Organic pork sector there is a lot of money to be made for the small producer. And those high-value organic pigs love to eat organic milk so there is ready demand for excess milk right there on the farm.

In short, my advice to dairy farmers is this: Convert to Organic, look for new markets, and diversify. Do not ask Congress to take my money and give it to you. That's just stealing by another name.

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