Frustrated with low milk prices, dairy farmers are selling cows for hamburger meat and threatening to dump milk into sewers. Many are burning through their life savings hoping to survive the slump, and others are exiting the business.

Two farmers have killed themselves.

The pain is being felt throughout the U.S. industry, but it's especially keen in California, the No. 1 dairy state. The Golden State's 1,800 dairies produce $7 billion worth of milk annually, more than one-fifth of the nation's supply. Slumping international demand combined with an American public ordering fewer cheese pizzas has soured the milk market.

Bob Lefebvre, executive director of the Minnesota Milk Producers Association, said the state's dairy industry had been racing to meet growing demand, which led them to produce 2.9 percent more milk in April of this year than last year. Now there's a glut of milk on the market.

"You don't just ask the cow to quit milking today," Lefebvre said.

Farmers are losing $5 to $7 per hundred pounds of milk, he said. "Try to think of it as you're going to work and you're paying your employer."

The dairy association has launched campaigns to sell more dairy, including one with Domino's Pizza selling "American Legends" pizzas that include 40 percent more cheese. The Midwest Dairy Association started a website, DairyMakesSense.com, to sell more milk.

Meanwhile, more dairy farms are going up for sale, said Joseph Bradley, a owner of the website Dairyrealty.com. "We're getting a lot more calls," Bradley said. A recent posting of a $3.2 million dairy farm in Perham, Minn., was a victim of low milk prices, he said. But they sell quickly, though, as investors in California and Europe snap up dairy farms at bargain prices, he said.

Current milk prices are about half of what it costs California producers to feed and milk their herds. Farmers are staying afloat by getting loans secured by every cow, tractor and acre they own. But experts say that if milk prices don't rise in the coming months, many farmers will go out of business.

"The amount of wealth being destroyed in this industry every week is just mind-boggling," said Geoffrey Vanden Heuvel, who owns dairies in Chino and Corona, Calif. "The emotional toll this is taking is just amazing."

Farm groups report a jump in stress-related health issues among dairy farmers.

"We are getting more phone calls and concerns about suicides than ever," said Michael Rosmann, executive director of AgriWellness Inc., a Harlan, Iowa, nonprofit operating mental-health hotlines for farmers in seven Midwestern states.

Through much of 2008, the average milk price hovered around $17 per 100 pounds -- although consumers purchase milk by the gallon, the industry measures by pounds. The bottom fell out of the market when the economy tanked last fall. Prices now hover around $10, according to the California Department of Food and Agriculture. Farmers generally need at least $16, and often more, per 100 pounds to break even, depending on their debt, feed requirements and other factors.

Collectively, U.S. farmers need to slash milk production by about 5 percent to bring supplies in balance with current demand.

The National Family Farm Coalition is calling for more emergency action to protect the nation's 57,000 dairy farmers. The NFFC is one of several farm groups urging Congress and the U.S. Department of Agriculture to set an emergency floor price of $18 per 100 pounds of milk.

So far, the main government action has been to buy up 238 million pounds of nonfat dry milk powder and 4.6 million pounds of butter since prices started to fall in October. Last week, the USDA said it would provide subsidies to export up to an additional 150 million pounds of nonfat dry milk, 46 million pounds of butterfat and 6 million pounds of cheese to help dry up the surplus. Cumulatively, these USDA actions will support milk prices by about 70 cents per 100 pounds of milk, said Roger Cryan, a National Milk Producers Federation economist.

Some farmers are thinking of doing the unthinkable -- dumping their milk as part of a national protest next week. Luis Bettencourt, an Idaho farmer who owns one of the biggest dairy companies in the nation, is considering dumping two days' worth of milk production -- about 8 million pounds.

"Why not?" he said. "We ain't getting any money for it anyway."

Source: Los Angeles Times & Minneapolis Star Tribune