January 31, 2008

Loss of milk production booster could cost dairy farmers, consumers

Announcements by retailers, such as Kroger and Deans Foods, began the domino-fall that first hit mid-East dairy co-ops and then individual dairy producers. Starting in February, Kroger stores in Indiana and 12 other Midwestern and Southern states will sell their store brand milk as not coming from cows treated with recombinant bovine somatotropin or rbST. Many other retailers have followed suit.

"The sad thing is, consumers will likely pay more for milk that is no different than the milk they purchased last month," said Michael Schutz, Purdue Extension dairy specialist.

How much more consumers might pay depends on local competition and retailer marketing strategies.

"Even though the milk is more expensive to produce, retailers may sell the rbST-free milk at a lower profit initially in order to get customers used to the product," said Corinne Alexander, a Purdue agricultural economist. "Longer term, whether the retailer can charge a higher price depends on their customers' preferences and what the local competition charges for milk."

Schutz said in order to accommodate the retailers' demands, co-ops that handle milk in the region began asking producers to pledge that they would not use rbST, produced by Monsanto under the name Posilac and used to boost milk production in cattle.

The retailers are making the labeling claims based on affidavits signed by the farmers stating that they do not use rbST and do not have it on their farms.

"There are no tests that we can run to scientifically determine the presence or absence of rbST in a cow's milk," Schutz said. "That is why the affidavits are used, there is no distinguishable difference in the milk itself."

Kroger has been selling rbST-free milk in other parts of the country, and company officials said the decision is based on "customers' increasing interest in their health and wellness," according to a company press release issued last August when the decision was announced. Their milk, as well as many others, also will carry the government approved statement: "The Food and Drug Administration has determined there is no significant difference between milk from rbST-treated cows and non-rbST treated cows."

When the FDA approved the biotech-derived growth hormone in 1993, it was determined that rbST does not pose a human health risk based on a review of research. The protein hormone somatotropin is not a steroid hormone and is found naturally in all cattle, Schutz said.

Without the use of rbST, dairy producers expect to lose money, and for some it may cause them to go out of business, Schutz said. "rbST was kind of an equalizer for farmers with smaller herds. It helped their operations be profitable," he said.

"One Indiana dairy producer milking 200 cows expects to lose $70,000 per year in net milk revenues, and this is just a small family farm."

For example, Mike Yoder, a dairy farmer in Elkhart County, used rbST on about 40 percent of his 400-cow herd. The company who picks up Yoder's milk said they would no longer take his milk if he didn't sign the affidavit by Jan. 1. As a result, Yoder said he was forced to sign.

"I'm being paid about $30,000 to $40,000 because I signed the affidavit, but that is just for this year," he said. In the meantime, Yoder said weaning his herd off of rbST will cost him about $120,000 in lost milk production.

Dairy farmers now must figure out how to offset the losses from not using rbST.

"Farmers will see decreased profits, and smaller farms will be at greater risk," Schutz said. "It will also mean that farmers will have to increase the size of their herds in order to replace lost milk production."

Schutz said larger herds mean larger farms, higher feed costs and more manure to clear out.

"The need for more cows to produce the same amount of milk increases the cost of milk production, and, ultimately, the cost of milk to consumers," he said

Animal welfare groups have supported the rbST-free movement, objecting to injecting cattle with the hormone. Some claims are made that the increased milk production from rbST can be linked to mastitis, an inflammation of the udder.

"Anything that increases milk production can lead to increased risk of mastitis, including better feeding of the animal and giving it more rest," Schutz said. "However, dairy producers can manage for that."

Not all milk producers are against the ban on rbST. Some larger dairies that market their own milk also plan to label their products as not coming from cows given the hormone.

Writer: Beth Forbes (765) 494-2722, forbes@purdue.edu

Sources: Michael Schutz, (765) 494-9478, mschutz@purdue.edu

Corinne Alexander, (765) 494-4249, cealexan@purdue.edu

Mike Yoder, (574) 825 3667

Ag Communications: (765) 494-2722;
Beth Forbes, forbes@purdue.edu
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