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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.

?All the processors have too much inventory on hand,? he said.

The price cut and production limit came partly in response to the troubles at the Humboldt Creamery outside Eureka, where production facilities are expected to be sold this summer. The creamery filed for bankruptcy protection this spring and since has ?slashed dramatically? its price for organic milk, Benedetti said.

Clover Stornetta also found that it had lined up extra organic milk to supply a major retailer, only to be told that the company had overestimated what it would purchase from Clover.

The final tally has yet to be announced, but at least 33 of the 367 herds slaughtered under the national buyout program this spring came from California, the top milk-producing state. More of the state?s 1,700 dairies are expected to join the next round of buyouts in a nation with 9.2 million dairy cows.

?I think we will lose more farmers this year,? Marsh said. ?This has been a year probably like no other since the Great Depression.?

The Mendoza dairy was the only one of the 100 in the North Bay that joined the first buyout program of the year. A few other dairymen have sold herds to other dairies, or are trying to sell. And farmers predicted more of their peers will try to join this summer?s buyout program.

?I think there?s guys that are going to have to,? said Doug Beretta, a Santa Rosa dairy owner and past president of the Sonoma County Farm Bureau. ?I think the banks and feed companies are going to force them to.?

Mendoza declined to say how much he received for his dairy cows. But a spokesman for Virginia-based Cooperatives Working Together, which oversees the herd retirements, said in the next round farmers can enter bids to sell for a maximum payment of roughly $1,500 a cow. In California, that is more than the slaughterhouse is paying today but less than dairy cows were worth in better years, farmers said.

Sebastopol dairyman Carinalli is a longtime friend of Mendoza, known to his fellow farmers as ?Joey.? He called Mendoza a respected and politically astute farmer, a black-hatted Republican who built a lasting relationship with U.S. Sen. Barbara Boxer when the Democrat was a Marin County supervisor.

With his children?s help, Mendoza hopes to eventually revive the 1,200-acre dairy, a business that his parents and grandmother fought to keep nearly a half century ago when the land was taken over by the federal government to become part of the Point Reyes National Seashore.

The family now leases the dairy?s treeless pastures, which touch both the Pacific Ocean on the west and the expansive Drakes Bay on the east. On a clear day Mendoza can see San Francisco, and at night he looks out on the lights of the Golden Gate Bridge.

The fertile grasslands could serve well his future plans for a much smaller, organic dairy, he said.

For now, he will keep raising heifers and calves there. He said he has the wherewithal to keep leasing the ranch until a year passes, and he is allowed to begin a new dairy without any financial penalty from participating in the herd retirement program.

Even so, he expressed sadness over watching 45 years of his toil and planning come to an end.

?I don?t know how to describe it,? he said. ?I guarantee you it?s horrible.?

You can reach Staff Writer Robert Digitale at 521-5285 or robert.digitale@pressdemocrat.com

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