Dairies in squeeze as stockpiles grow

SACRAMENTO, June 1 (UPI) -- A record stockpile of cheese has pushed U.S. milk prices lower, although the price of feeding dairy cows continues to rise, dairy farmers said.

"I've seen the ups and downs, but I've never seen it like this," said George Simoes, a dairy farmer in Elk Grove, Calif., told the Sacramento (Calif.) Bee Monday.

Prices dairy farmers received for milk escalated in 2007 and 2008, causing farmers to add cows to their production lines. With 914 million pounds of cheese in cold storage, however, prices have dropped recently.

The State of California said dairy farmers are now losing 50 cents for each gallon of milk they produce, the newspaper said.

"Each wreck has gotten more violent," said Geoffrey Vanden Heuvel, a dairy farmer who is also vice president of the Milk Producers Council, a farmers' organization.

The group is pushing a plan to set a quota for farm growth that would fine dairy farms that grow too fast. "It can knock down the peaks and fill in the valleys" of roller coaster price fluctuations, Cornell University dairy pricing expert Mark Stephenson said.