While the average American cow produces 6.5 gallons of milk each day, twice as much as in 1970, the farmers selling the milk are now losing money. In California milk is $2.20 a gallon, about a third less than it was two years ago. The reason? Supply and demand. After years of cows and dairy farms becoming larger and more productive, milk prices went down, demand dropped, and farmers found themselves in big trouble. As operating costs began to exceed the farm income some farmers have been forced to sell cows for slaughter. The Obama administration has agreed to provide export subsidies and to buy dairy products in order both to help farmers and to assist low-income families who need the food, but the long-term problem of America's more than 60,000 dairies is left unanswered. Quotes "You have a series of bad policy signals here, too, just as we've seen in banking, just as we've seen in the housing industry, too. Basically, they're upside down, like many mortgage-owners are now, too, with their homes, except they're upside down with multimillion-dollar dairy operations that they can't pencil out a profit as far as the eye can see." Ken Cook, environmental working group "Yes, you can butcher the cows or go out of business, and that's about your only choices, and neither one of them is one that you want to do. And right now, everyone's stuck in this catch-22 situation. If you beef too many cows, you don't have enough milk in the tank." Michael Oosten, dairy farmer "You know, our fundamental problem is that our ability to produce exceeds the market's ability to absorb it, and we don't have a national system that really communicates in any meaningful way an appropriate supply of milk." Geoffrey Vanden Heuvel, dairy farmer Warm Up Questions 1. How much do you think half a gallon of milk costs? 2. Where does your mile come from? Discussion Questions 1. Does is surprise you that the dairy industry is impacted by the global recession? Why or why not? 2. Can you name other industries that have been affected by the recession? How have they been hurt? 3. Does learning about the dairy farmers make you more likely to pay more for milk? Why or why not? Additional Resources Read the transcript