News

Dairy farmers still in the red?

An ag economist says the USDA’s cost of production numbers for dairy farmers are overstated.

Peter Vitaliano with National Milk Producers Federation tells Brownfield the costs of production numbers released by USDA’s economic research services are an economic analysis of costs and include a few numbers that have no actual monetary value.

“I’ve found that when I communicate to producers in terms of ‘Are you making money or are you losing money?’—they relate a lot more to the adjustments that I make to reduce USDA’s numbers.”

Vitaliano says factors including unpaid family labor and machinery recovery costs can inflate dairy farmers’ actual production costs.

USDA’s May milk costs of production are down slightly from last year, but are up fractionally on the month. The U.S. cost of production for dairy farmers during May totaled $21.71 per hundredweight.  That compares to the USDA’s all milk price for the month of $14.50.

AUDIO: Interview with Peter Vitaliano