By Alison Fitzgerald  2010-05-27 03:00:00.0 GMT

May 27 (Bloomberg) — At Harold Howrigans dairy farms in northern Vermont last year, the red ink was flowing almost as fast as the milk. The dairyman was losing nearly $100 per cow each month because the price for 100pounds of milk fell to $11, well under the $18cost of production.

It was bad. People had to borrow money just to make ends meet, says Howrigan. Prices have recovered some, though not enough to pay down the new debt, he says.

These are tough times for Americas 60,000-odd dairy farms, thanks to a decade-long deflationary trend in prices and a particularly severe downturn last year, Bloomberg Businessweek reports in its May 31 issue. Industry sales fell 30percent in 2009, to $24.1billion, from the year-earlier period, according to the Agriculture Department.

Congress, which spent $350million on emergency dairy price supports last year, has taken notice. So has the Justice Department, which is scrutinizing the market power of the biggest dairy cooperatives and food companies to assess the effect on prices.

Along with the USDA, Justice Department officials will hold a June 25 hearing in Madison, Wisconsin, on dairy market concentration. Meanwhile, the Commodity Futures Trading Commission is reviewing complaints of price manipulation in the spot cash market for cheddar cheese, which also affects the price of milk. More