HOLLAND, Mich. (AP) — Despite a worldwide milk glut that has sent prices plummeting, Michigan dairy farmers continue to produce milk at a loss, relying on subsidies to get them by as they wait for prices to improve.

Producers face higher costs but less demand for milk, partly because of a dried-up export market.

Just two years ago, around 10 percent of the state's milk went to Asian and other markets, but none of it is exported now, said Ira Krupp, a dairy expert with Michigan State University Extension.

"When the world economy went in the toilet, so did our export market," Krupp told The Holland Sentinel for a story published Monday.

At the heart of the problem is the nature of milk. Unlike grain farmers who can hold out for better prices by storing crops in a silo, dairymen must sell raw milk to processors or else it spoils. And cows keep producing regardless of economic conditions.

The price paid by processors to farmers is set by the U.S. Department of Agriculture based on commodity markets, which rise and fall with global demand. Some of the raw milk is processed into milk for stores as well as butter, yogurt and other products for U.S. consumption. The rest becomes powdered milk, cheese and whey for international and domestic markets.

According to the National Milk Producers Federation, prices that dairy farmers get for 100 pounds of milk fell from $20.58 last November to $13.29 in August.

Prices are projected to be $14.18 this month. Krupp said he expected prices to remain down for several more months.

Dennis Raterink of Zeeland Township, a dairy farmer in southwestern Michigan, said he is relying on subsidies from the USDA's Farm Service Agency until prices reverse course.

Andy Stille, an FSA official in Grand Haven, said dairy farmers statewide have received $31.2 million in subsidies since February.

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Information from: The Holland Sentinel, http://www.thehollandsentinel.com