Dairy prices and the World Ag Expo

Porterville in one of the top dairy producing counties in the country. I think we provide ~36% of the milk for California, before even thinking about cheese.

Recently, there have been stories in the news about how the dairy farms have been hit hard to the point that the farmers are trying to sell large fractions of their herds and there are no buyers.

This appears to be due to the collapse of the price that is paid to the farmer, as well as the increase in price in inputs such as feed products.

Since the farmers production capacity wasn’t really reduced at all, you’d think if the price they are getting paid is dropping, then that would be reflected in the retail price too, much as with what happened with gas.

Like gas, I think milk at that level is often sold on futures contract, so it might take a while, but expect either the price of milk and dairy products to fall fast soon, or to start seeing about how, with herds reduced, it is harder to find enough supply in the retail channel.

I am not a farmer, but I live among them, my interest is really in the inefficiencies of the distribution channel from farms to retail.

Conveniently, the world’s largest agriculture trade show is next week in this county, and I would be amazed if this is not topic 1.

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