Arizona dairies in peril

A global fall in the demand for milk has dropped wholesale prices so low that Arizona dairy farmers have begun slaughtering cows to stay in business. The lower demand, last year's high grain prices, increased production from other countries and last year's scandal in China involving milk tainted with the industrial chemical melamine are all causing Arizona dairymen to lose about $100 per cow per month, experts say. Arizona's dairy slump has rippled to other areas of agriculture, such as beef and hay producers. "We have a lot of dairies in the 2,000- to 3,000-cow range. So, they are losing $200,000 to $300,000 a month. The big question is how long will prices stay down like that," said Gary Dyer, president and chief executive officer of Farm Credit Services Southwest, a Tempe agricultural-cooperative lender that does half its business with dairy farms and hay producers. Farmers estimate it costs about $180 each month to feed a dairy cow. They are recouping less than half that amount in dairy-product sales. The combination of high costs and low prices has forced farmers to thin their herds to survive. The damage to the dairy industry, in turn, hurts farmers like Rogers who grow corn, alfalfa hay and cotton seed as cattle feed. Hay is Arizona's largest crop and hay prices have dropped from about $225 a ton a year ago to about $130, Dyer said. The dairy-cow reduction also hurts beef ranchers, who fear their selling prices will drop because of all the extra dairy cows on the market...Arizona Republic