One of the largest dairies in Montana filed for bankruptcy protection this month, a casualty of plunging milk prices that has producers around the country on the brink.
Hillside Farms Inc. of Charlo, owned primarily by Stan Perry, filed for Chapter 11 bankruptcy protection July 10. When contacted by the Independent the Perry family confirmed that milk prices forced the company to file, but declined to comment further.
"Prices are just about at an all-time low for producers," says Monte Nick, chief of the Montana Department of Livestock's Milk Control Bureau. This year, according to Nick, milk prices in Montana hit their lowest level since 1996 at $11.98 per 100 pounds. That's compared to the high of $24.46 in October 2007.
"We've lost a lot of [dairies] over the last several years," Nick says. "When I first started the shop in 2000, we had about 180 producers. Right now we have 77."
Nick was aware of two Montana dairies to go under this year, not including Hillside Farms. "And I expect more," he says, "especially if prices keep going down. They just can't make enough to live." Plus, he notes, at the same time, the costs of running a farm—most notably grain—keep going up.
Milk's price slump has to do with an abundance of supply, the result of foreign markets drying up amid the global economic recession.
"Basically, the change from a year ago has been in the export market," says Walt Wosje of Cooperatives Working Together (CWT), a national dairy group. "A year ago about 11 percent of all the milk produced in the United States was loaded on ships and exported in the form of butter or powder or cheese or whatever. When the economic morass hit the world, a lot of those countries that were importing our products couldn't afford it, changed their diet, did something, and therefore today, only about 5 percent of our milk is exported."
In May, CWT announced its 12-month "herd retirement program," an attempt to crank down supply by sending dairy cows to the butcher. In the first retirement series, CWT accepted bids to kill more than 100,000 cows, representing almost 2 billion pounds of milk production capacity. On the same day Hillside Farms filed for Chapter 11, CWT announced its second retirement, which, Wosje says, may result in another 100,000 killed cows. None, so far, have come from Montana.