2014 projected to be record year for milk prices
MONTPELIER -- Vermont dairy farmers were paid a record high price for their milk in April and prices remain strong, driven in part by international demand for U.S. dairy products. The extra income is allowing farmers to pay off debt, repair equipment and make other investments, following challenging years in 2012 and 2009.
"We have some catching up to do," said Jacques Parent of Parent Family Farm in Highgate.
The farm -- which has about 700 cows that are milked -- is revamping a few of its barns and making repairs and updates to tractors and trucks.
"Just upgrades and sprucing up and getting loose ends tied up," Parent said last week.
The high prices have also allowed the farm to hire an extra hand to do upkeep on the buildings, painting them, mending doors and finishing other work.
Farmers were paid about $24 per 100 pounds of milk in April, and the price is expected to average $22 to $23 for the year. That would be a record year for Vermont since the state started keeping dairy price records in 1977.
"The export market is unbelievable," Parent said. "Pray for peace in the world because if something could happen screwy, we could really get in an upside-down cart in a hurry."
The country now exports about 15 percent of its milk, up from about 7 percent 10 years ago, mostly as powdered milk, whey powder, cheese, butter and some milk.
"We say one day a week, all the milk in this country goes overseas," said Bob Wellington, an economist with the Agri-Mark Inc. dairy cooperative, which includes Vermont-based Cabot Creamery.
Agri-Mark exports most of its more than 50 million pounds of whey -- a byproduct from cheese-making -- produced at its Middlebury plant to about a dozen countries.
One of its two whey products has a high protein content and is used in baby food, among other things. The other is used in some foods and animal feed.
The U.S., Wellington said, is "really going to be the milk pitcher of the world."
The international demand is driven by population growth, as well as the number of middle- and higher-income people around the world who want to add dairy to their diets, he said.
Milk prices are expected to remain strong, but political strife in some areas of the world -- nothing to do with dairy farming -- could affect prices.
Despite the high prices, farmers still have had to deal with high feed and fuel costs, so it's really the margin between the expenses and price they're paid that is considered.
"Gas and diesel prices have kind of leveled off somewhat and then some of the grain prices have gone down somewhat -- not huge changes but enough that the profitability is better, and many farmers are cleaning up old debt that they incurred in 2009," said Diane Bothfeld, deputy secretary of the Vermont Agency of Agriculture.
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