Southwest dairies contain production to protect prices
The executive director of the Texas Association of Dairymen says the state’s processing capacity is maxed out to the point farmers’ income will be impacted if there’s too much milk production growth this year.
“We’re really in a situation where we have too much milk going forward, and we have put in a tiered pricing program for some of the cooperatives in the state trying to limit some production going forward.”
Darren Turley tells Brownfield the state’s largest dairy cooperatives, Dairy Farmers of America and Select Milk Producers, have started a program that when instigated will pay farmers 90 percent for their production and discount additional milk to discourage overproduction for the next two years.
“We were starting to have to dispose of milk in other states during our peak flush times trying to find a home for milk all across the country and knew it was impacting producers’ paychecks and could not continue,” he explains.
He says with no signs of new processing in the region in the short-term, the farmer-owned cooperatives decided put limits on themselves to preserve prices. Turley says it also could help farmers ready to exit.
“I think we’re going to see a continued shift in the size of farm to larger and we’re going to lose, at a little bit faster rate, some of our smaller production.”
The tiered program is also underway in New Mexico, and parts of Kansas and Oklahoma.
More than 350 dairy farms make up the Texas dairy industry which produced nearly 15 billion pounds of milk in 2020, up 10 percent from the year prior with 33,000 more cows than in 2019.