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Dairy Focus: Dealing with Stress

The Cooperatives Working Together Herd Retirement program may be an option for dairy farmers wanting to get out of the milk production business.

By J.W. Schroeder, Dairy Specialist

NDSU Extension Service

Stress comes from many sources. It can be weather-related, business-professional challenges, financial strain, disaster or a combination of any of these.

North Dakota and Midwestern farmers, especially dairy producers, have lamented a longer than typical winter, seven months of perilously low milk prices, high input costs and, for some, weather and flood disaster. While we hate to see any of our dairy producers leave the industry, the only thing we dislike more is to see them depart without getting true value for their many years of work.

Given the dramatic downturn in dairy economics, one alternative for dairy producers to consider may be the ninth round of the CWT (Cooperatives Working Together) Herd Retirement program that began April 1.

Who Can Participate

You can bid in this CWT herd retirement if:

  • You, as an individual, or the milk marketing cooperative you belong to have been a full member of CWT since January 2009.
  • You have not sold, leased, licensed, lent, exchanged or otherwise transferred any cows except for slaughter since March 1, 2009.

What You Must Do

The following materials must be postmarked by the May 1, 2009, the deadline for your bid to be considered:

  • A completed bid form, available at http://www.cwt.coop or by calling (888) 463-6298
  • A milk company printout as verification of milk marketed each month during the period from March 1, 2008, through Feb. 28, 2009, for all farms in which you hold an interest

These materials should be mailed to: CWT Herd Retirement Program, P.O. Box 41049, Bethesda, MD 20824-1049.

Time line

  • April 1, 2009 - Bid process opens
  • May 1, 2009 - Deadline for submitting bids
  • May 4-May 18, 2009 - Independent audit firm reviews bids
  • May 19-May 21, 2009 - Bids reviewed by CWT staff and final bid selection made by CWT
  • May 27, 2009 - Farm audits begin
  • June 19, 2009 - All bidders, including successful bidders not yet audited and unsuccessful bidders, will be notified

To help you prepare a bid, you can enter your own figures in the worksheet below. Follow the instructions given for each line. For an interactive form where the calculations are completed automatically for you, go to the CWT Web site at http://www.cwt.coop.

  1. Enter the number of milking and dry cows in your herd.
  2. Your estimate of the average value per cow of the cows in your herd.
  3. Multiply line 2 by line 1. This is your estimate of the total value of your herd.
  4. Enter the average weight of the milking and dry cows in your herd.
  5. Enter your estimate of the slaughter price per pound of live weight.
  6. Multiply line 4 by line 5. This is your estimated slaughter value.
  7. Multiply line 6 by line 1. This is your estimate of the total slaughter value of your herd.
  8. Subtract line 7 from line 3. This is your estimate of the total value of your herd less the slaughter value and represents your total payment from CWT if your bid is selected.
  9. Enter your milk marketings, in pounds, from March 1, 2008, through Feb. 28, 2009.
  10. Divide line 9 by 100. This is your milk marketings in hundredweights.
  11. Divide line 8 by line 10. This is your estimate per hundredweight of the value of your herd less the slaughter value using this bid calculator. However, you are free to bid any amount you wish.

If you don’t have adequate access to the Internet, see your local county Extension Service office for assistance.


NDSU Agriculture Communication

Source:J.W. Schroeder, (701) 231-7663, jw.schroeder@ndsu.edu
Editor:Ellen Crawford, (701) 231-5391, ellen.crawford@ndsu.edu
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