Second dairy cow retirement scheduled for October

Cattle Market & Farm Reports, Editorials
Sep 20, 2004
by WLJ
Beginning October 1, a second dairy cow retirement will be put into implementation in order to reduce national milk supplies and spike sputtering milk prices. Several beef market analysts said that while the program will ruffle some cow/calf producers' feathers, that the program will probably not hurt the beef market that much, if any.
According to officials in charge of Cooperatives Working Together (CWT), a self-funded, self help program of the National Milk Producers Federation (NMPF), a total of 49,000 dairy cows will be removed out of production permanently and done so by being taken to beef processors. In total, the CWT initiative is expected to reduce nationwide milk supplies by 870 million pounds.
This is the second time that CWT funds will be used to retire cowherds, permanently. The first retirement initiative happened during August of 2003, when a total of 32,274 cows, representing 608 million pounds of annual milk production, were processed.
CWT's management committee voted to allocate 80 percent of it funds to the herd retirement program, with the remaining 20 percent earmarked for an export assistance program.
Beef market analysts said that just the announcement of more dairy cows being processed has gotten beef producers "up in arms" in the past. However, they said when looking at the overall market, the impact should be minimal.
Most sources said that there is so much additional need for lean beef from the hamburger and further processing sector, that the impact of 49,000 slaughter cows won't be felt much, particularly if the sale of them is spread out over several months.
"If we were talking 100,000 head or more, then there might be an issue, but at less than 50,000 head, that is an additional per month figure of 8-12,000 head, which isn't that much," one Denver-based market analyst said. "On top of that, we are talking about cows that don't bring much product to the table, and that needs to be taken into account also. They are providing lean product that will go towards hamburger or some other further processed products."
Information on the bidding process for the dairy cow retirement program will be made available, by CWT, starting September 27. That information is available by accessing the web site, or calling 888/463-6298. — Steven D. Vetter, WLJ Editor