Milk surplus has California dairy farmers struggling

Drink up – milk prices are expected to stay low through summer as the dairy business struggles with a glut.

The price farmers get for their milk will rise nearly a dime May 1, pushing up minimum retail prices by roughly the same amount.

But milk is still selling for far less than it costs to produce. As production outpaces demand, analysts and farmers expect the market to stay weak for the next few months.

"We'll just be prepared for an ugly financial situation," said Case Van Steyn, who milks about 1,000 cows in the Galt area.

The dairy sector is stuck with too many cows and not enough demand. And over the past couple of years rising feed prices increased costs.

Exports of dairy products are down by a third from last year, thanks to the bad global economy, a stronger dollar and foreign competitors.

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