American independent dairy farmers are getting killed by a glut of milk that is causing depressed prices and making independent small dairy farms unable to compete.  The price of milk experienced a historic run-up in 2007, and dairy farmers raced to cash in by expanding their herds. (Why do we always do this to ourselves? Corn or milk, it’s always the same story. ) Then in 2008, as global recession lowered foreign demand, the oversupply further magnified the situation. US dairy farmers have long complained that there is a lack of competition in the market for their milk. I agree. The industry is dominated by just two players: Dean Foods Co. of Dallas, and Dairy Farmers of America Inc. of Kansas City, Missouri.   DFA is a cooperative that buys milk from farmers and sells some of it to Dean Foods. Dean Foods is more of a milk branding and distribution company that has been creating a monopoly national brand through smaller and what appears to be local brands throughout the country.   Because of all of this, a group of dairy farmers is slated to meet with Christine Varney, chief of the Justice Department's antitrust division, Today in Washington.  They are also scheduled to appear Saturday at a Vermont hearing of the Senate Judiciary Committee, which is populated with several Democrats from big dairy states such as Wisconsin, Minnesota and New York.  The interesting thing to note is that its not just happening to US farmers.  Yesterday dairy farmers in Belgium, who are angry at the low prices they are receiving for their milk, collectively decided to spray three million liters of the stuff onto a field in protest.  (Pictures of Milk Spraying)  The farmers there say they have to sell their milk for less than it costs to produce and many will go out of business if the situation continues.

It will be interesting to see how this whole thing plays out.  In the mean time, let’s keep in mind that if you see what appears to be an unbelievable market shift that is creating a massive opportunity, think twice before you jump.   If you see it, hundreds and possibly thousands of farmers just like you are probably seeing and thinking the exact same thing.  There is nothing wrong with creating your own opportunities and being the only guy in your area “doing” your thing.  Diversify, diversify, diversify.