Next round of dairy buy-out is open

ARLINGTON, Va. — Cooperatives Working Together has opened its latest herd retirement round. Bids are being accepted starting today through May 1.

“We all recognize that 2009 is shaping up to be among the toughest years on record for dairy farmers, but CWT will help shorten the price plunge farmers are facing, and speed the recovery,” said Jerry Kozak, president and CEO of National Milk Producers Federation, which manages CWT.

This is the seventh herd retirement round since CWT began operations in the summer of 2003.

Market value

Kozak expects that, since the value of cows and heifers has dropped dramatically, the price level of bids accepted will be much lower than in recent years.

There is no set target for the volume of milk or the number of cows to be removed in this round.

“Whether CWT will remove a significant number of dairy animals will depend on the number of bids received and the price level of those bids,” Kozak said. “CWT will not pay more for cows than what they are currently worth in the marketplace.”

As was the case in 2008, in addition to submitting bids for their milk herds, participating farmers will have the option of offering all of their bred heifers, at a flat price of $700 per animal.

New rules

There are two program rule changes in this round:

1. Members of CWT whose bids were accepted in a previous round may bid again in this round. This is a one-time exception to the exclusion affecting prior participants in the program;

2. Producers whose bids are accepted in the next and future herd retirements will be paid in two installments: 90 percent of the amount bid times the producer’s 12 months of milk production when it is verified that that all cows have gone to slaughter, and the remaining 10 percent plus interest at the end of 12 months following the farm audit, IF both the producer and his dairy facility — whether owned or leased — do not become involved in the commercial production and marketing of milk during that period.

All dairy producers submitting bids to sell their herds must be members of CWT effective January 2009, either through their membership in a fully participating cooperative, or as an independent member of CWT.

Learn more

Detailed information can be found at www.cwt.coop, including bid forms, an interactive bid calculator to help estimate a farmer’s bid, and answers to frequently-asked questions.

For more information, call 888-Info-CWT (888-463-6298).

Cooperatives Working Together is funded by dairy cooperatives and individual dairy farmers, who are contributing 10 cents per hundredweight assessment on their milk production through December 2010.

Related article:

CWT removes more than 50,000 cows (2/18/2009)

Now you can follow Farm and Dairy on Twitter.