Three years ago, a technological breakthrough gave dairy farmers the chance to bend a basic rule of nature: no longer would their cows have to give birth to equal numbers of female and male offspring. Instead, using a high-technology method to sort the sperm of dairy bulls, they could produce mostly female calves to be raised into profitable milk producers.
Now the first cows bred with that technology, tens of thousands of them, are entering milking herds across the country – and the timing could hardly be worse.
The dairy industry is in crisis, with prices so low that farmers are selling their milk below production cost. The industry is struggling to cut output. And yet the wave of excess cows is about to start dumping milk into a market that does not need it.
“It’s real simple,” said Tony De Groot, an early adopter of the new breeding technology, who milks 4,200 cows on a farm here in the heart of this state’s struggling dairy region. “We’ve just got too many cattle on hand and too many heifers on hand, and the supply just keeps on coming and coming.”
The average price farmers received for their milk in July was $11.30 for 100 pounds, down from $19.30 in July 2008. The retail price of milk has not dropped as much, but it is down 24 percent in a year, to an average of $2.91 a gallon for milk with 2 percent fat.
Desperate to drive up prices by stemming the gusher of unwanted milk, a dairy industry group, the National Milk Producers Federation, has been paying farmers to send herds to slaughter. Since January the program has culled about 230,000 cows nationwide.
But the sorting technique, known as sexed semen, is expected to put 63,000 extra heifers into milk production this year, compared with the number that would be available if only conventional semen had been used, researchers estimate. That number will jump to 161,000 next year, and farmers fear it could double again in 2011.
While that is a fraction of the 9.2 million milk cows nationwide, the extra cows this year and next could roughly equal those removed from production by the industry’s culling program.
Economists expect milk prices to recover only gradually, which has farmers worried about the impact of so many extra heifers and the milk they could produce.
“Just as the industry starts to recover from these difficult times, we’re going to see these heifers enter the marketplace,” said Ray Souza, president of Western United Dairymen, which represents farmers who produce about 60 percent of the milk in California. “At the very worst it could certainly stop the recovery altogether and send us into another price recession.”
The sorting technology relies on slight size differences between the Y chromosome, which produces male offspring, and the X chromosome, which produces female offspring and has a slightly larger amount of genetic material, or DNA.