By Kenny Burdine, UK Ag Economist
CWT (Cooperatives Working Together) has announced another round of dairy herd buyouts. Bids are to be submitted by October 15. Producers bid a price per cwt. on a year’s worth of milk production per cow. As a quick example, a $5 per cwt. bid on 15,000 lbs of annual milk production would be $750. Then the producer would also receive the income from the sale of the cow at market. There is a list on the CWT website of member cooperatives. Many producers are likely already selling in participating coops and are therefore eligible.
Beef producers should primarily be aware of the timing. With bids accepted through October 15th, I would expect that slaughter would largely take place in November and early December.
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How long does a producer have to stay out of the dairy business if the receive the buyout?
ReplyDeleteAccording to the CWT website, CWT requires successful herd retirement bidders and the premises on which they produce milk to stay out of producing and marketing milk for 12 months following completion of the CWT farm audit. CWT will pay successful bidders in two installments; 90% when CWT receives verification that all dry and milking cows have gone to slaughter and, at the end of the 12-month waiting period, the remaining 10% plus interest if neither the producer nor the dairy premises (whether owned by the producer or leased) go back in business producing and marketing of milk during that twelve month period.
ReplyDeleteMore information can be found at http://www.cwt.coop/action/action_herd_faqs.html