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Northeast dairy co-op to dock farmers for overproduction

milk truck
Farms that produce above highest three-year volume will be docked $5/cwt.

Agri-Mark, one of the largest dairy cooperatives in the Northeast U.S., marketing more than 370 million gal. of milk each year for more than 850 dairy farm families, is implementing measures to try to stabilize the region’s industry by limiting production. The change was approved by the co-op board and outlined in a letter to its members.

The letter to members explained that, effective Jan. 1, 2020, any producers who exceed their highest three-year volume will be docked $5/cwt.

"It's designed to just slow down milk production, not totally stop it, but just slow down the growth so it can be at a manageable level,” an Agri-Mark spokesperson told Vermont Public Radio.

The letter explained that producers in the region are continuing to increase milk production, even though demand has regionally slowed. This is causing financial strain for the co-op, it said.

"The co-op profit is barely above the breakeven point through August, as we have experienced significant losses on excess milk and the downturn in world trade, especially on whey products, continues to create losses in this area,” the letter said.

“We are at the point now where we can’t allow our members to grow without some type of supply management program,” it continued.

Farms with production at 2 million lb. of milk or less each year have been exempted from the program.

TAGS: Business
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