Northwest Missouri Dairy Farm Responds to Potential Price Hike on Milk
By: William Seay
Updated: December 29, 2012
(OSBORN, Mo.) As Congress continues to delay compromise on the so-called Fiscal Cliff, dairy farmers are concerned about the "Dairy Cliff."
The farm bill, a piece of legislation that sets rates on agriculture subsidies, has yet to be renewed by Congress.
Some economists say this could lead to a drastic increase in dairy prices at the supermarket.
But Leroy Shatto, owner of Shatto Milk Company, doesn't worry the same way other farmers do.
His dairy bottles its own milk, and sets its own prices.
"Before that we used to worry about what the milk price was - what the mailbox milk price was to the dairy farmer. And it would fluctuate every month," Shatto said.
Shatto supports a new farm bill.
He says dairy farmers deserve to be paid for what they do.
"The day before I started bottling my own milk, they were paying me $10.86 per hundred pounds of milk - it's how they buy milk from a dairy farmer," Shatto explains. "And it was costing me $11.00 to $11.25 to produce it. That's why all my friends in northern Missouri quit. They got smart and quit."
Dairy cows are expensive to maintain.
Shatto says each of his cows eats nearly 90 pounds of feed a day.
With hundreds of cows, just feeding them is very pricy.
Farmers rely on subsidies just to handle those day-to-day costs.
"With the drought and the way feed cost has gone up, we cannot raise the price enough to take care of all that. People will only pay so much money for milk. When it gets over that, they'll find another alternative or quit drinking milk altogether," Shatto said.
His dairy wouldn't be as affected by the lack of a new farm bill.
But Leroy Shatto still says it's important for his industry.
The farm bill, a piece of legislation that sets rates on agriculture subsidies, has yet to be renewed by Congress.
Some economists say this could lead to a drastic increase in dairy prices at the supermarket.
But Leroy Shatto, owner of Shatto Milk Company, doesn't worry the same way other farmers do.
His dairy bottles its own milk, and sets its own prices.
"Before that we used to worry about what the milk price was - what the mailbox milk price was to the dairy farmer. And it would fluctuate every month," Shatto said.
Shatto supports a new farm bill.
He says dairy farmers deserve to be paid for what they do.
"The day before I started bottling my own milk, they were paying me $10.86 per hundred pounds of milk - it's how they buy milk from a dairy farmer," Shatto explains. "And it was costing me $11.00 to $11.25 to produce it. That's why all my friends in northern Missouri quit. They got smart and quit."
Dairy cows are expensive to maintain.
Shatto says each of his cows eats nearly 90 pounds of feed a day.
With hundreds of cows, just feeding them is very pricy.
Farmers rely on subsidies just to handle those day-to-day costs.
"With the drought and the way feed cost has gone up, we cannot raise the price enough to take care of all that. People will only pay so much money for milk. When it gets over that, they'll find another alternative or quit drinking milk altogether," Shatto said.
His dairy wouldn't be as affected by the lack of a new farm bill.
But Leroy Shatto still says it's important for his industry.
