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|Archives - November 2009|
|Wednesday, October 21, 2009|
Oregon dairy farmers have been losing money since the financial crisis drove down milk prices last fall.
Farmers don’t see many options besides continuing to sell at a loss, since cows must be milked regularly and farms can’t cut costs without compromising their health and milk. No one wants to buy dairy cows, and selling cattle for ground beef is a last resort. Most farmers are now relying on credit and savings to stay in business.
A program created and funded by dairy producers offers buyouts to farmers who are ready to retire, but it has raised the price of milk by just $.71 per hundred pounds. The average price paid to Oregon dairy farmers in 2008 was $20.11 per hundred pounds of milk; the average for 2009 to date is $10.94. Most farmers need prices in the $15 range in order to break even.
A few Oregon farmers have gone out of business, says Jim Krahn, executive director of the Oregon Dairy Farmer’s Association. He expects more farmers will close down before prices stabilize at a sustainable level.
“I’ve essentially lost everything that I’ve worked for in the last 20 years,” says Louie Kazemeir of Rickreall Dairy in Polk County, where 1,600 cattle produce 4 million pounds of milk a month. Kazemeir estimates he’s losing between $6,000 and $8,000 a day, totaling $1.2 million so far in 2009.
The good news is that milk prices seem to have turned around; the futures market shows enough of an increase in November’s prices to make some farmers a profit. But even as farmers recover, complex subsidies and pricing formulas ensure that the industry will continue to boom and bust. The answer is more regulation, Kazemeir says.
“We need to get production controls across the country to avoid this again,” he says. Milk prices were low in 2005 but rose to historic highs in 2007, when farmers added cows to cash in. When prices dove back down, some farmers were still paying off the loans they had taken out to add capacity.
U.S. Agriculture Secretary Tom Vilsack said last month that the dairy industry must be restructured to be less volatile. In the meantime, dairy farmers are getting a modest bailout: $290 million in direct payments and $60 million for the government to buy cheese.
Thursday, May 29, 2014
BY COURTNEY SHERWOOD
Business and civic leaders weigh the risks and rewards of going green.
Monday, July 14, 2014
BY VIVIAN MCINERNY | OB BLOGGER
Some people think Amazon’s winking eye logo is starting to look like a hoodwink.
Thursday, May 29, 2014
BY SOPHIA BENNETT
Tillamook expands its tourism niche.
Thursday, July 10, 2014
BY TOM COX | OB BLOGGER
Tom Cox interviews Dr. Mark Goulston, author of Just Listen, Discover the Secret to Getting Through to Absolutely Anyone.
Thursday, May 29, 2014
BY LINDA BAKER
Remember mood rings? A team of scientists at Oregon State University has designed what might be considered a 21st-century analog of the ’70s jewelry fad: a bracelet that reveals one’s exposure to pollutants.
Thursday, July 03, 2014
BY TED AUSTIN & MIKE BAELE | GUEST CONTRIBUTORS
The Office of Economic Analysis announced that Oregon is currently enjoying the strongest job growth since 2006. While this resurgence has been welcome, the lingering effects of the 2008 “Great Recession” continues to affect Oregon businesses, especially with regard to estate planning and business succession.
Friday, July 18, 2014
BY JASON NORRIS | OB GUEST CONTRIBUTOR
Back in May, we shared a common Wall Street quote about investing, “Sell in May and go away.” Fast forward to July and the most common question we have been getting from clients is, “When is the market pullback going to occur?”
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