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Home / Articles / News / Local News /  Indicators: April 1

Indicators: April 1

Hay Ride

April 1, 2009, 12:00 am

30%  is the drop in New Mexico milk prices between January 2008 and January 2009.

"Do I buy Country Life butter to support our hardworking British dairy farmers? No, it’s their career choice. I buy Country Life because I love the taste on me crumpets."­—Former Sex Pistols front man Johnny Rotten in the Country Life butter ad campaign, which is credited with increasing the company’s sales by 10 percent in 2008

New Mexico’s agricultural economy is kind of like the “circle of life” in The Lion King.

New Mexicans eat cheese, drink milk, chug lattes. That dairy comes from cows. Those cows eat hay—New Mexico’s top agricultural product. Hay farmers in turn pay taxes, wages and buy supplies, which puts money in the pockets of dairy-loving New Mexicans.

The problem is New Mexico’s agriculture economy isn’t a closed system: Last summer, prices soared as dairy farmers expanded production to meet a global demand. Then the global economy plummeted and dairy exports tanked. Now, faced with a 2 percent surplus, prices have capsized.

“We’re about at the bottom and it’s going to be there for a couple more months,” GH Cain, Southwest region membership coordinator for Dairy Farmers of America, tells SFR. “Unfortunately, the solution is we gotta get those sales back up on an international market to absorb this production, which doesn’t seem like it’s going to happen.”

Despite subsidization efforts from the US Department of Agriculture, New Mexico may see many of its 172 dairy farms bite the dust. And that could wound New Mexico’s hay industry, worth more than $250 million per year.

Already, New Mexico hay growers have ratcheted up their prices to record levels to account for higher costs for electricity, fuel, water and fertilizer, according to Justin Boswell, executive director of the New Mexico Hay Growers Association.

Boswell says he’s worried the dairy crisis is about to catch up with the hay market. So far, agricultural banks haven’t been hit as hard by the financial crisis, but those two might suddenly feel the credit crunch.

“At this point [no hay operation] has really been shut down, but that may just be because of a lag time,” Boswell says.

 

 

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