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Across the country dairy farmers are drowning in a months-long milk glut that has driven the price of dairy products extremely low and is putting small farms out of business. The price of milk, which is set by commodities markets, was high last year as global demand swelled. Farmers increased production to keep up, bringing in more cows and expanding farms. Then, the recession hit and demand suddenly dropped, leaving farmers with production costs that remained high but an income that collapsed. A large part of the price volatility is due to the unique nature of milk – it has to be sold as soon as it is produced, unlike grain which can be stored in silos. The drop in price has not been wholly passed onto consumers as dairy processors recoup some of their losses from high prices a year ago. In the mean time this summer, small farms in particular are facing financial ruin. Some farmers have been paid to kill cows, others have dumped milk into the ground in protest. Independent organic dairies have an additional problem – their organic milk is being undercut by a glut of milk produced by factory farms and labeled organic. The factory farms include Aurora Dairy, whose milk is found on the shelves of discount retailers like Walmart and Costco as low-priced organic milk. Aurora has been accused of exploiting loopholes in organics standards to dilute organic milk with conventional and sell it under the organic label.

GUEST: Mark Kastel, Co-Director of the Cornucopia Institute, James Dunn, Professor of Agricultural Economics at Penn State University

For more information, visit www.cornucopia.org.