Southwest Blizzard Update: Farmers Paid $4.5 Million for Lost Milk Production

Dairy farmers in the path of winter storm Goliath's mammoth blizzard lost millions of dollars in milk production. Producers who are members of the Greater Southwest Agency, comprised of Dairy Farmers of America (DFA), Select Milk Producers and ZIA Milk Producers, received financial relief for those losses-- to the tune of $4.5 million.

Throughout the two-day storm producers were either unable to milk cows because of the extreme conditions, or they had to dump the milk they produced down the drain because the roads were closed and milk trucks couldn't pick it up. The Agency estimates 24 million pounds of milk were produced and dumped down the drain between the three cooperatives during the storm.

Tara Vander Dussen of Rajen Dairy, a member of Select Milk Producers, says they dumped six loads of milk on their farm.

The co-ops have voted to pay every producer in the affected region 85% of their average pre-storm milk volume for the five days following the storm, Dec. 27-31. A decision that GH Cain, DFA's director of member services in the region, says isn't standard procedure.

"Because of the uniqueness of this situation, not only are members paying for the dumped milk, but also a portion of production loss value to producers in the region," Cain says.

The payments, included in December milk checks, were calculated using the farms' average daily shipments and average components prior to the storm.

"In the middle of the storm everybody's production goes down. Our standard policy would have a producer who wasn't able to get cows milked, paying for milk that was dumped by a neighbor. The total production impact felt by the guy who wasn't able to milk was often more severe," he explained. "We were trying to come up with a method, not perfect, not ideal, that would recognize that in some fashion."

Other dairy producer members in New Mexico, Texas and Kansas paid $0.43/ cwt to cover the cost of the lost production, according to Cain.

"This is a very unique situation to this event only," he says. "We are not changing our policy and we are not changing our structure."

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