Second dairy herd retirement program begins

By KARI KRAMER | East Texas Edition

As with the first round of dairy herd retirement, cattle accepted into the program will earn a pink ear tag that indicates they must be sold for slaughter. -- Staff photo

Jan. 6, 2005 - Cooperatives Working Together (CWT) is in the midst of processing applications for the second dairy herd retirement program.

The details of the accepted applications could be another four to five weeks in coming, according to Chris Galen of the National Milk Producers Federation (NMPF).

"We won't be able to release the final numbers until we know that all of the cows involved have been processed," said Galen in late December.

The herd retirement program allows farmers accepted into the program to receive compensation for retiring entire herds of dairy animals. The producer must then sell the animal for slaughter in the United States, but is permitted to keep the money generated from the slaughter sales.

The total number of bids for this program were 732, according to NMPF. Only 378 bids were initially accepted, but must first be evaluated and processed before the final contract can take place.

In the first herd retirement program, a total of 299 bids were excepted, with increased the cull number to 33,000. The program eliminated approximately 608 million pounds of milk from the market.

"So far, things are going smoothly. We expect that nearly all of the bids initially accepted will be eventually processed and we'll meet, possibly exceed, our target goal of 870 million pounds," said Galen.

The herd retirement program is one of three methods CWT uses to stabilize the diary markets. Export assistance programs use contracts to send dairy products out of the country when prices for cheese and butter drop to minimum levels. The reduced marketing program is the third device used by CWT to manage the dairy market.

CWT was organized in 2003 by the NMPF in response to the supply and demand imbalances that can depress the dairy market.