Fate of New York Dairy Industry Uncertain

If you listen to what dairy farmers are saying, you may conclude that New York State’s status as a “Dairy State” is unlikely to continue.

Small farms and large alike are being negatively impacted by the low milk prices and the numbers are staggering.

“We lost $3,000 in one month,” reports Terri Phillips of Dellavale Farm, Montgomery County. “I can’t imagine what it is on a bigger farm!” Dellavale milks about 50 cows.

Sandie Prokop co-owner of Schoharie County’s Crossbrook Dairy Farm, is milking nearly 400. “The main point is that at the end of the week, after 80-plus hours of work, my son — the daily manager — has zero dollars for all his work! Every penny that can be scraped up is spent for expenses.”

Prokop says last month the Northeast Market Administrator’s blend price paid $14.71 to Crossbrook. She says the “financial cliff where dairy farmers now stand” is being kept “secret”. “The community and consumers think that all is just fine! This really puts additional pressure on the farming community; when payments may need to be only partial — or late. There is absolutely no sensitivity to the issues — or their future impact to every community!”

Tom Borden, co-owner of 7th generation, family-owned, orchard/dairy, O.A Borden & Sons Inc., Washington County, agrees. “Low prices are certainly hurting us,” Borden remarked. “Milk prices are currently over 35 percent below prices we were receiving in October of 2014.”

During November 2013 Borden’s installed robotic milkers to keep up with the demand for milk. Now, milking 170, Borden says that 2015 was a “break-even year at best,” and says necessary upgrades for equipment and facilities will be impossible. “This is a very serious situation for dairy farmers — and really not getting much attention. I am discouraged about the short-term outlook for small and medium-sized dairy farms. Supposed rosy long-term outlooks won’t matter if we can’t survive the short term.”

In a recent teleconference held by the National Family Farm Coalition, Northeastern Pennsylvania, lifelong dairy farmer Arden Tewksbury, Progressive Agriculture Organization manager and longtime dairy activist, spoke about the milk pricing crisis, which is impacting dairy farmers and thousands of farm related industries across the nation. “If consumers think that everything is alright with the dairy farmers, someone is not doing their job!” Tewksbury stated. “It’s a terrible situation — the loss that our dairy farms are going through! My whole life I’ve never seen conditions on dairy farms as bad as they are now.”

Tewksbury said the average New York dairy farm produces 2.7 million pounds of milk annually and those farmers will lose about $30,000 more this year than in 2009. “Farmers have got to get behind a new pricing formula! The present pricing formula does not take into consideration costs, they are not getting anywhere near the cost.” The last price paid for March was $14.81/cwt. “In 1999 the price was $14.63, in 17 years, dairy farmers are getting the same price! If that does not make everybody’s hair stand up, I don’t know what will.”

Many dairy farms have already closed and an overwhelming number are on the edge of the cliff.

“How are your sons going to make the dairy farm succeed when they’re getting the same price for the milk as they were getting in 1999?” Tewksbury asked.

“Our cost to produce 100 lbs. of milk is $18.75,” reported 5th generation dairy farmer Bob Button of Jasper, NY. The retired Steuben Co. farmer said his sons each milk 150 cows. “What is sad is that my dad and I had it better than they do today!” Button said in 1978 the farm was receiving $14.70 /cwt. Expense prices have doubled and tripled, while milk prices are the same. “It doesn’t take a rocket scientist to figure it out!” Button said he has been transporting cows from neighboring farms to the auction, with many going for meat.

Neighbor dairyman Rodney Mullen of Rexville, Steuben County, reported there are only three dairies left in his area where nearly 30 stood previously. He and his wife are currently milking 170. Mullen, worries about how he will pay employees in addition to paying production costs and other escalating farm expenses. “Margin protection program doesn’t help us now. And now New York wants me to pay my help $15 an hour. The stress is just ripping my guts out.”

“Everyone is impacted by the prices we are receiving now,” said Eric Ooms of A. Ooms & Sons Dairy, milking 425 in Columbia County. “The scary part is that there is no clear path to higher prices at this point. In 2015, we were coming off record high prices in 2014; so many folks may have had a cushion. That’s not the case this year and with all the market signals being negative, it’s hard to say when they will go up. That can only add to people’s stress.”

Fulton County dairyman Paul Shuster and his wife milk about 50. “We have no income,” Shuster said. He thinks putting restrictions on how much milk farms can make, like the supply management program seen in Canada’s quota system, is the answer. He says that some mid-west co-ops are already accepting limited supplies from dairies. However, he realizes that farmers milking thousands of cows don’t want to be held back and would resist such a program. “If the price goes low enough, I’ll just step out.”

Dave Balbian, Central New York Dairy Specialist, Cornell, commented on the crisis dairy farms face. “The most recent (March 2016) Market Administrator’s Report shows a Statistical Uniform Price of $14.81/cwt. for milk delivered to Suffolk County (Boston) for 3.5 percent fat and 2.99 percent protein milk. Most people will end up with something less than that in our area. Even with higher components (for normal Holstein milk) typical hauling costs, advertising deducts, co-op dues, etc., and a lower PPD, net milk prices could be south of $14/cwt. and even less for many people. In addition, some folks are being charged a “market adjustment” fee that will bring their “net milk price” down into the $13 range!” Balbian said assuming there is a net milk price of $13.50/cwt. at 70 lbs./cow/day, you end up with $9.45 total milk income per cow per day. “Take an estimated total feed cost of $5.75 (purchased and home grown) away and you end up with $3.70/cow/day that is left to pay all other expenses. It’s nowhere near enough to cover all other expenses!”

Tewksbury said crisis is consistent across the U.S.

“What are we going do about it?” asked Tewksbury. “The real solution is having the “federal milk marketing improvement act” (S1640) reintroduced into congress.” He advises folks to bombard senators and congressmen with phone calls and letters promoting a new federal pricing formula to include total farm expenses. “Congress should also put a floor price of $20/cwt, so prices cannot go below that.”

By: Elizabeth A. Tomlin
Source: Country Folks