Here is a market update from the Chicago Mercantile Exchange Daily Livestock Report. This update gives a summary on the recent completion of the dairy herd reduction program. Did you take part in this program? Have you in the past? What do you think about these buyouts? Beef and dairy producers have definitely been split on their opinions about these programs, and I would like to hear your thoughts.

Cooperatives Working Together (CWT)) announced recently that it has completed the qualification phase for its 7th dairy herd reduction program. This round of herd retirement removed 101,400 cows heifers from the national’s dairy herd. CWT says that the cows removed accounted for almost two billion pounds of milk per year.

CWT removed 367 diary herds in 41 states. Though the announcement did not mention it, our contacts indicated that the remainder of these cows should move to slaughter by the end of July. Dairy cow slaughter was 59,454 head for the week of June 20, the last week for which data are available. That number is roughly 10,000 head higher than the level before the CWT program began moving cows to slaughter. At that pace, it would take about 10 weeks to slaughter the cows, a time frame that fits reasonably well with the late July conclusion of the program. CWT Chief Operating Officer that additional CWT herd reductions are likely in 2009 given continued low milk prices and the imbalance between supply and demand.

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