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The Future of Dairy: Lower Quality and Higher Prices?

July 20, 2009

OTTAWA, Ohio - The executive director of the Ohio Farmers Union says the state's dairy farmers are going broke because of a broken pricing system, a situation he says won't be good for consumers, either. The official, Roger Crossgrove, says many dairymen are being forced out of business, as the cost of producing milk is higher than the price they get when they sell it. He adds that this will likely generate more imports from other countries, which could result in safety issues.

"If we go to import products, they are not required to have the same health standards that we are, so we are going to have a lower-quality product and lower health standards than we have in the United States."

Crossgrove says middlemen are using cheap prices to make their own profits while dairymen lose money. With the current pricing system, he says, the consumer is paying much too high a price.

"There's a difference of almost triple the price from the farm gate to the retailer, so they are being gouged for the cost of dairy products."

Crossgrove says it will only get worse if too many dairy producers go out of business, with the supply of milk and dairy products eventually dropping, leading to even higher prices at the grocery store. Crossgrove says the farmer's share of a gallon of milk that sells for $2.99 is only 91 cents.

Crossgrove and others are working on long-term policy solutions that would evenly divide profits in the dairy industry. Congress is also being encouraged to pass a dairy stimulus package as a financial lifeline for dairy producers across the country.

Mary Kuhlman, Public News Service - OH