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Pain remains for dairy, beef

Tough times continue for area beef and dairy producers, with the latter particularly hard hit.

Worldwide economic problems have cut into beef and milk prices, leading to fewer beef and dairy cattle nationwide and regionally, according to the U.S. Department of Agriculture.

Given the poor prices, some producers have gone out of business or reduced the size of their herds.

The outlook for beef is brightening, with prices rebounding a bit this year. But milk prices remain far below the level that producers need just to break even financially, dairy officials say.

"It just doesn't look good for the rest of 2010," said Kent Swenson, general manager of Dusty Willow Dairy in Lakota, N.D.

Area milk producers typically need $15 to $16 per hundredweight to break even, he said.

Now, milk prices are several dollars per hundredweight below that break-even price, officials say.

North Dakota's dairy industry has been losing ground for decades, with small, family operations going out of business when the proprietor retires.

But Swenson and others involved with dairy in the state had hoped North Dakota's wide-open spaces and plentiful supply of feed could lead to a resurgence of dairy.

Minnesota's dairy industry had been on the upswing, with many producers investing in their operations a few years ago to become bigger and more efficient, said Bob Lefebvre, director of the state Milk Producers Association in Buffalo.

That helps explain why Minnesota's dairy numbers rose in 2009, despite poor milk prices, he said.

Even so, he said he was surprised to see an increase.

Minnesota dairy producers are losing money and badly need milk prices to rise, he said.

Part of the dilemma is that dairy producers are becoming more efficient, increasing the amount of milk obtained from each cow. That's offsetting the decline in the number of milk cows, Lefebvre said.

Milk prices won't rise until the global economy strengthens and U.S. milk exports rise, Swenson said.

Declining beef cattle numbers have pushed up beef prices recently, said Tim Petry, livestock economist with the North Dakota State University Extension Service.

But that hasn't necessarily helped area cow-calf operations, or ones on which cows give birth in the spring and their calves are sold late in the year, he said.

In many cases, cow-calf operators sold their calves before the recent rebound, Petry said.

He doesn't think livestock producers will start making money until next year.

"We're going to need the economy to get better, and (consumer) demand to improve, Petry said.

Knutson is a reporter at The Forum of Fargo-Moorhead, which is owned by Forum Communications Co.

But area beef cattle producers' mood has improved, said Jack Reich, a Zap, N.D. cattleman and president of the state Cattlemen's Association.

"The market is rebounding, and the outlook is just better," said Reich said.