SIOUX CITY, Iowa (KCAU) – Immigrant labor and tariff wars are just a few factors that are causing lower dairy prices. Lee Maasen, the owner of Maasen Dairy Farms, has spent the majority of his life producing milk and has seen a lot of changes in farm production since he began in the 1970s.
“At that time we milked 15 cows, that was our herd size. Today, we have 1700 cows and now all the milking is automated,” said Maasen.
Automated production has increased the speed of dairy products over the years. But now, farmers are dealing with new problems that are resulting in dairy prices going down. Scott Schroeder, executive director of Western Iowa Dairy Alliance, explained what is driving dairy prices down.
“Today, we are seeing class seven milk from Canada, the trade tariffs, the EU getting rid of their quota system. All of these have contributed to what we have now for our dairy prices,” said Schroeder.
According to Iowa State University Extension and Outreach Dairy Specialist Fred Hall, the numbers began decreasing five years ago and have had trouble getting back to where they were.
“Let’s go back five years when we had $20 milk as our base in the Midwest. Today, we’re looking at $15.50 to $16.00 milk. So, that has put a lot of financial stress on all of the sizes of dairy,” said Hall.
While the numbers remain low, Schroeder said they are hopeful for the future.
“Economist project that a dollar to a dollar-and-a-half increase in milk price by the end of 2019,” said Scott Schroeder.
Three Iowa farms have closed since prices began to drop. Maasen believes they will see an increase in numbers by 2020 with the help of local consumers.