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Dairy Prices Expected to Rise Due to Plant Closure

Posted: Mar 7, 2013 6:56 PM by Elise Oggioni
Updated: Mar 9, 2013 4:30 PM

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COLUMBIA - With the announcement Thursday that a milk processing plant in Monett would be closing later this year, many economists said dairy prices are set to rise as a result.

Officers with the Dairy Farmers of America notified employees earlier this week that the plant would be closing in September because it is losing money.

MU Beef and Dairy Economist Joe Horner said this plant in Monett often served as a place for Missouri dairy famers to store any extra milk they had left over.

"There are those times of the year when there's a surplus of milk. In the spring flush, when dairy cows are on pasture and they're milking quite a bit, or there are times when dairy plants want to shut down for three days in a row and not bottle milk, you can dump a lot of milk into a cheese plant."

Horner also said he doesn't anticipate the increase in prices to hit consumers for a couple of months for now.

Now that one of Missouri's eight milk processing plants is closing, Horner said it is obviously going to cost more money to bring in dairy from out of state.

"It costs about $4 a loaded mile to move milk, so every time you lose a local processing plant, there are costs to be incurred and that usually ends up at the consumer level at some point," Horner said.

The Monett Times reported Wednesday that employees would be transferred to other companies within a 70-mile radius.

Horner said he does not know how economists calculated the rise to be 36 cents, but said transportation costs are most likely the biggest factor in that calculation.

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