Joseph ?Joey? Mendoza walks slowly through an empty milking barn at his 150-year-old dairy down the road from the Point Reyes Lighthouse.
Mendoza, 65, a third-generation dairyman, sold his 489 dairy cows three weeks ago as part of a national program that seeks to ease what many are calling the worst milk crisis in 70 years.
More than 100,000 cows were sent to slaughter under a program developed by the National Milk Producers Federation. Milk prices remain depressed, and program officials recently announced another ?herd retirement? that seeks to remove roughly 100,000 more animals from milk production by paying up to $1,500 per cow.
For Mendoza, whose grandfather came to the Point Reyes area to milk cows at the turn of the last century, the decision to sell his Holsteins was especially painful. He called it necessary to pay off creditors and to stop the months of financial losses caused by high feed costs and low milk prices. Those prices seem tied to a slump in exports.
?We were going to go broke, and we didn?t want to do that,? Mendoza said.
Many North Bay dairies have been losing money since last fall, but the losses accelerated in February when the state-set minimum price took its biggest drop in 54 years. The minimum that farmers received for bottled milk hit 97 cents a gallon. California, which regulates the basic price of milk based on various commodity prices, has set the minimum at $1.02 this month.
As a result, a typical California dairy with 1,000 cows is losing about $100,000 a month, said Michael Marsh, chief executive officer of the Modesto-based Western United Dairymen. The economic troubles contributed to the suicides of two Central Valley dairy farmers this spring.
The dairy farmers? woes have meant a drop in consumer prices.
On Saturday, a gallon of milk from Petaluma-based Clover Stornetta Farms sold in three Sonoma County markets from $3.49 to $4.29, as much as 90 cents lower than in late January.
The shaky national economy and the low milk prices have sharply depressed the value of farmland and cows. Domenic Carinalli, who runs a 350-cow dairy outside Sebastopol, likened those assets to a worker?s 401(k) retirement fund.
?Since the beginning of the year,? he said, ?half of everything I?ve worked for in the last 50 years, it?s just gone.?
The North Bay has long been milk country. Aided by abundant rainfall and mild winters, Point Reyes became the state?s first commercial dairy region, sending butter and cheese 150 years ago by schooner to San Francisco. In those early years Marin County led the state in milk production.
Even today milk remains Sonoma County?s second-largest crop, surpassed only by wine grapes. But in the past three decades, increasing competition has prompted more than 130 county dairies to close or consolidate into bigger operations.
Today, the county has about 70 dairies, and Marin County has nearly 30.
In recent months the pain has spread to the premium organic milk market.
Clover Stornetta Farms of Petaluma this spring asked its participating organic dairies to cut their shipments to the company overall by about 17 percent. And for the first time in a decade of organic production, the company this month cut the price it pays farmers by roughly 7 percent, said Clover Stornetta President Marcus Benedetti.