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U.S. Dairies Will Cull 34,442 Cows to Lift Milk Price

July 7 (Bloomberg) -- As many as 34,442 dairy cows in the U.S. will be removed from producer herds and sold to slaughterhouses through an industry program to boost milk prices by curbing output.

The cull, financed by the National Milk Producers Federation, is the first since three “herd retirements” last year removed 200,761 cows, the group said today in an e-mailed statement.

“This latest herd retirement will push cow numbers lower still, which is what our industry needs” after the number of dairy cattle rebounded from a three-year low in December, said Jerry Kozak, the president and chief executive officer of the Arlington, Virginia-based federation.

Class III milk futures for August delivery rose 1 cent to $14.63 per 100 pounds on the Chicago Mercantile Exchange. The price has jumped 45 percent in the past year.

In the nine previous culls since the summer of 2003, more than 480,000 dairy cows were slaughtered, data from the federation show. The latest program is the first since last fall.

Milk production climbed 1.1 percent in May to 15.741 billion pounds (7.7 billion kilograms) from a year earlier, the U.S. Department of Agriculture said last month. The May dairy herd totaled 9.103 million head, down 1.8 percent from a year earlier, while the average cow produced 1,866 pounds of milk, or 3 percent more, the USDA said.

The average price farmers will get for all milk this year will be $15.95 per 100 pounds, a 24 percent increase from 2009, according to the USDA.

To contact the reporter on this story: Jeff Wilson in Chicago at Jwilson29@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.

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