Cows up, but profits down

Sadie Frericks is just the sort of person the dairy industry hopes to keep attracting.

She and her husband are young, educated, from dairy farm backgrounds, and they now maintain a 50-head herd on their farm near Melrose.

They also received help from two state programs designed to promote the dairy and livestock industry — programs that are poised to receive a substantial cut in Gov. Tim Pawlenty’s budget at exactly the wrong time, dairy industry supporters say.

After four years of profitability and an increase in the number of cows and dairy farmers in the state, several factors are colliding that could be devastating to the industry’s future.

Pat Lunemann, president of the Minnesota Milk Producers Association, brought Frericks to the House Agriculture, Rural Economies and Veterans Affairs Finance Division Feb. 10 as an example of how well the Livestock Investment Grant and the Dairy Profitability Enhancement Program work, and why full funding should continue.

“We are in a crisis at the moment created by a perfect storm,” Lunemann told division members on Dairy Day at the Capitol, the traditional time set aside for legislators to be updated on the dairy industry.

Milk prices may be up for consumers, but to the producer they are down to levels they haven’t seen since 2002, while the cost of production is on the rise. The international banking crisis compounds the problem, Lunemann said, because purchasers can’t get the credit to stock their inventories.

Curt Zimmerman, livestock supervisor for the Agriculture Department, said Minnesota is the fifth largest exporter of milk products in the nation.

Rep. Al Juhnke (DFL-Willmar), division chairman, promoted his idea to fund the two dairy programs through the governor’s $50 million small-businesses grant proposal. “Agriculture is one of the few things that is working in the state. … We want to keep you strong.”