Florida Dairy Industry Poised to Lose $99 Million

Milking cows for a living comes with its share of daily responsibilities.

The top priority for Florida’s 140 dairy farmers is the health and well-being of their animals. Dairy cows that are healthy and content allow farmers to produce a wholesome supply of locally produced milk for consumers.

Farmers also have great respect for the land and the natural resources around them. Caring for the environment and being a good neighbor allows them to be an active participant in a sustainable Florida.

These days, however, dairy farmers are facing a challenge that is threatening their way of life. Economic hardship is affecting Florida’s dairy industry, which is poised to lose $99 million this year, according to a University of Florida study.

Since December of 2008, the price dairy farmers receive for their milk has been in steep decline, forcing many farmers to reduce production by selling cows, renegotiating loans or selling land.

Farmers do not set the price of milk. Wholesale and retail prices are determined by market forces of supply and demand. On average, farmers receive only about 30 cents of every dollar that consumers spend on dairy products, according to the National Milk Producers Federation. The other 70 cents is split among others in the supply chain.

Among the biggest factors impacting dairy farmers is the price of feed, which has skyrocketed. Two years ago, feed costs for Florida’s dairy farmers averaged about 37-40 percent of their total costs. These days, that cost accounts for about 55-65 percent.

“Feed cost is the greatest cost for Florida dairy operations,” said Matt Lussier, president of Dairy Farmers, Inc., and owner of Lussier Dairy in Hawthorne. “The majority of cattle feed used in Florida is purchased from out of state, due to challenges in growing high-quality feed in our climate. Farmers in other parts of the country have more options.”

It has put farmers in survival mode.

“I am selling some liquid assets and may sell some land,” said Woody Larson, a third generation farmer who owns two dairy farms near Okeechobee. “We have stopped all capital purchases of equipment, etc. We cannot reinvest in our business.”

Yet, Florida dairy producers remain committed to providing ‘nature’s most perfect food’ under even these challenging economic conditions. Each new day brings another opportunity to do what they do best: work with their animals and the land.

For more information on the University of Florida’s Institute of Food and Agricultural Science report on the dairy industry, visit http://edis.ifas.ufl.edu/document_an215.