CWT Announces Herd Retirement
In light of the perilous financial plight affecting America’s dairy farmers, Cooperatives Working Together announced Wednesday that it will conduct its latest herd retirement round. Bids are being accepted starting today through Friday, May 1st.
”We all recognize that 2009 is shaping up to be among the toughest years on record for dairy farmers, but CWT will help shorten the price plunge farmers are facing, and speed the recovery,” said Jerry Kozak, President and CEO of NMPF, which manages CWT.
This is the seventh herd retirement round since CWT began operations in the summer of 2003.
Kozak said that, given the dramatic downturn in dairy economics in the past six months, CWT is anticipating a large number of bids. However, since the value of cows and heifers has dropped dramatically, the price level of bids accepted will be much lower than in recent years. As has been the case in recent herd retirement rounds, Kozak said CWT has no set target for the volume of milk or the number of cows to be removed in this round.
“As always, CWT staff will continue to use the program’s funds wisely. Dairy farmers hoping to have their bids accepted should fully recognize the competitive nature of the bidding process and be realistic in determining the value of their cows when preparing their bids,” he said. “Whether CWT will remove a significant number of dairy animals will depend on the number of bids received and the price level of those bids. CWT will not pay more for cows than what they are currently worth in the marketplace.”
As was the case in 2008, in addition to submitting bids for their milk herds, participating farmers will have the option of offering all of their bred heifers, at a flat price of $700 per animal. In addition, there are two program rule changes in this round:
1. Members of CWT whose bids were accepted in a previous round may bid again in this round. This is a one-time exception to the exclusion affecting prior participants in the program;
2. Producers whose bids are accepted in the next and future herd retirements will be paid in two installments: 90% of the amount bid times the producer’s 12 months of milk production when it is verified that that all cows have gone to slaughter, and the remaining 10% plus interest at the end of 12 months following the farm audit, IF both the producer and his dairy facility – whether owned or leased – do not become involved in the commercial production and marketing of milk during that period.
Detailed information can be found at www.cwt.coop, including bid forms, an interactive bid calculator to help estimate a farmer’s bid, and answers to frequently-asked questions. All bids must be postmarked by Friday, May 1st, in order to be considered. All dairy producers submitting bids to sell their herds must be members of CWT effective January 2009, either through their membership in a fully participating cooperative, or as an independent member of CWT.
For more information, call 888-Info-CWT (888-463-6298).
.......................................................................................................................................................................
Dairy Products Prices
As of April 11, 2009
Cheddar Cheese
U.S. 40 pound block $1.28/pound (up $0.02 from April 4, 2009)
U.S. 500 pound barrels $1.30/pound (down $0.021 from April 4, 2009)
Butter
U.S. 68 pound box, USDA Grade AA $1.16/pound (down $0.013 from April 4, 2009)
Nonfat Dry Milk
USDA Extra Grade $0.82/pound (up $0.004 from April 4, 2009)
Dry Whey
USDA Extra Grade $0.193/pound (up $0.015 from April 4, 2009)
Source – USDA National Agricultural Statistics Service, Dairy Products Prices released April 17, 2009
.......................................................................................................................................................................
Milk Production
As of April 17, 2009
23 Major States - March 2009
15.2 billion pounds
0.2 percent decrease from March 2008
23 Major States - February 2009Revised
13.6 billion pounds
2.7 percent decrease from February 2008
23 million pounds – revised amount decrease
0.2 percent – revised amount reduction
Source – USDA National Agricultural Statistics Service, Milk Production released April 17, 2009
.......................................................................................................................................................................
USDA Responds to Producer Concerns By Extending Sign-Up Date for DCP and ACRE Programs
Secretary of Agriculture Tom Vilsack announced that USDA has extended the sign-up deadline from June 1, to Aug. 14, 2009, for both the Direct and Counter-cyclical Program (DCP) and the forthcoming Average Crop Revenue Election (ACRE) Program. This action extends the sign-up deadline by 10 weeks to give producers ample time to decide whether to participate in ACRE or remain in DCP.
"Extending the DCP and ACRE sign-up deadline will help ensure that America's farmers have enough information and time to determine whether to participate in the ACRE Program. The DCP and ACRE programs play a critical role in the farm safety net and it is vital that we act to support the hard work of the farmers we depend on," Vilsack said.
Sign-up for ACRE was expected to start in late April, with an official sign-up announcement to be made in the coming weeks. Producers can elect ACRE at their FSA county office after the sign-up period commences. The original June 1 deadline may have forced producers to rush their decision, which is why this extension gives producers more time to make an informed decision about staying with DCP for 2009 or participating in ACRE for crop year 2009 and beyond through 2012.
The ACRE program, authorized by the 2008 Farm Bill, provides eligible producers a state-level revenue guarantee, based on the 5-year state Olympic average yield and the 2-year national average price. ACRE payments are made when both state and farm-level triggers are met. By participating in ACRE, producers elect to forgo counter-cyclical payments, receive a 20-percent reduction in direct payments and a 30-percent reduction in loan rates. The decision to elect ACRE binds the farm to the program through the 2012 crop year, the last crop year covered by the 2008 Act.
For more information about ACRE, DCP and other price support programs, please visit your FSA county office or http://www.fsa.usda.gov.
Go back to the articles page
