America’s Dairy Farmers are Struggling and Unsupported

Debbie Weingarten June 27, 2018

Cows grazing in Northampton County, Penn.

When Lor­raine Lewandrows­ki dri­ves from her Herkimer Coun­ty dairy farm to her law office each day, she notices the changes hap­pen­ing across rur­al upstate New York. When I grew up here, we had 30 or 40 farms in our neigh­bor­hood,” she says. We had a local hard­ware store, machin­ery deal­ers, two den­tists, two doc­tors. We had a vibrant rur­al town. Now we don’t have that.”

Today, she says, road­sides are dot­ted with for sale” signs. Farms sit vacant, their own­ers hav­ing relo­cat­ed to urban areas in search of work. Once-pris­tine barns have become dilap­i­dat­ed after years of low prices left farm­ers with­out mon­ey for infra­struc­ture upkeep. The clos­est city, Uti­ca, is the sixth-most dis­tressed city in the coun­try, with about half of the adults unem­ployed and more than a quar­ter of the pop­u­la­tion liv­ing in poverty.

Depressed farm prices are impact­ing farm­ers across indus­tries nation­wide. Since 2013, farm income has fall­en by more than 50 per­cent, and medi­an farm income for 2018 is pro­ject­ed to be neg­a­tive (-$1,316, to be exact). But dairy farm­ers are arguably being hit the hard­est, as they face a fourth year of milk prices that are well below the cost of pro­duc­tion. The result­ing stress has become so pro­nounced that the Agri-Mark Dairy Coop­er­a­tive, which man­ages milk sales for its mem­ber farms, sent farm­ers sui­cide hot­line num­bers along with their milk checks ear­li­er this year.

Today, it costs a farmer approx­i­mate­ly $22 to pro­duce a hun­dred­weight, or one hun­dred pounds, of milk. But the mar­ket price for milk is sig­nif­i­cant­ly less. While the price of milk con­stant­ly fluc­tu­ates, farm­ers are cur­rent­ly paid as low as $15 per hun­dred­weight — 30 per­cent less than the cost of production.

Farm­ers and orga­ni­za­tions are call­ing on leg­is­la­tors in both the House and the Sen­ate to draft Farm Bill leg­is­la­tion that address­es the cur­rent farm cri­sis. While the U.S. Sen­ate Farm Bill is expect­ed to be intro­duced as soon as this week, the House ver­sion will be brought back to the floor for a sec­ond time on June 22, after 30 Repub­li­cans joined all 183 Democ­rats in defeat­ing the bill in May. In a Nation­al Fam­i­ly Farm Coali­tion (NFFC) press release that applaud­ed the defeat of the House Bill, board pres­i­dent and fourth gen­er­a­tion dairy farmer Jim Good­man said, This bill missed a key oppor­tu­ni­ty to fix the ongo­ing cri­sis in the dairy sec­tor and the down­turn in the farm econ­o­my. With the bill’s defeat, Con­gress can now go back to work to draft a true bipar­ti­san farm bill — one that is sup­port­ive of fam­i­ly farm­ers, rur­al com­mu­ni­ties, SNAP recip­i­ents, and the environment.”

The release builds on an April let­ter that the NFFC — along with 50 oth­er orga­ni­za­tions — sent to Sec­re­tary of Agri­cul­ture Son­ny Per­due and Con­gres­sion­al lead­er­ship of agri­cul­ture com­mit­tees, demand­ing that atten­tion be paid to the dairy cri­sis before more farms are lost. Small, fam­i­ly-run dairy farms play a vital role in the rur­al econ­o­my while pro­vid­ing a safe, afford­able food to con­sumers. If the cur­rent cycle of low prices and con­tract­ed dairy mar­kets con­tin­ues, we will see vir­tu­al­ly all of these farms go out of busi­ness, with seri­ous impacts on the eco­nom­ic and social health of rur­al Amer­i­ca,” they wrote.

The groups pro­posed set­ting an imme­di­ate floor price of $20 per hun­dred pounds of milk, an emer­gency mea­sure that would res­cue dairy farm­ers on the brink of los­ing their oper­a­tions. The groups also pro­posed a shift in dairy pol­i­cy to ensure a bal­ance between sup­ply and demand, known as sup­ply management.”

Sup­ply man­age­ment poli­cies were first imple­ment­ed after the Great Depres­sion to sta­bi­lize the mar­ket. The sup­ply of agri­cul­tur­al prod­ucts was coor­di­nat­ed, and strate­gic reserves of com­modi­ties were stored to sup­ple­ment Amer­i­can food sup­ply dur­ing times of poor yields. If sup­ply began to over­bur­den reserves, farm­ers were paid by the fed­er­al gov­ern­ment to take land out of pro­duc­tion to avoid flood­ing the market.

But in the 1970s, agri­cul­ture made a swift about-face. Earl Butz, the Sec­re­tary of Agri­cul­ture dur­ing the Nixon Admin­is­tra­tion, famous­ly took the approach of get big or get out.” He encour­aged farm­ers to pro­duce as much as they could and dan­gled the promise of for­eign exports for any over­ages. The new era encour­aged farm­ers to take out loans to lease more land and buy equip­ment built for larg­er scale oper­a­tions. But increased pro­duc­tion led to a dip in prices at the same time that the U.S. enact­ed a grain embar­go against the Sovi­et Union. The domi­nos began to fall — mar­ket prices crashed, inter­est rates sky­rock­et­ed, loans were called in. By the mid-1980s, the Farm Cri­sis — the biggest farm crash since the Great Depres­sion — was in full swing. As a result, tens of thou­sands of farms were lost, and many rur­al com­mu­ni­ties expe­ri­enced a forced exo­dus of its residents.

Some wor­ry that today’s agri­cul­tur­al reces­sion too close­ly echoes the lead-up to the 1980s Farm Cri­sis: over­sup­ply and falling crop prices, ris­ing inter­est rates, fam­i­ly farms rapid­ly going out of busi­ness, and now a loom­ing trade war that could impact over 90 agri­cul­tur­al exports. And as dairy farm­ers face a cri­sis that has reached emer­gency lev­els, the idea of sup­ply man­age­ment is being res­ur­rect­ed, appear­ing on the lips of farm­ers and experts as an approach worth dis­cussing. It’s not with­out con­tro­ver­sy, of course. Those opposed to it say the pol­i­cy allows gov­ern­ment to unnec­es­sar­i­ly inter­fere in pri­vate mar­ket­places. But sup­port­ers say it would steady the volatile dairy mar­ket by keep­ing milk pro­duc­tion in rel­a­tive bal­ance with demand.

NFFC’s Good­man says, Sup­ply man­age­ment is a long term fix. If we real­ly want­ed to look for­ward and say, We don’t want this cri­sis to hap­pen again… what steps can we take to pre­vent it?’, then sup­ply man­age­ment would be one of those.”

Many sup­port­ers of sup­ply man­age­ment point to the suc­cess of Canada’s dairy pro­gram, in which farms own shares in the mar­ket and are required to increase or decrease pro­duc­tion accord­ing to demand. The group Dairy Farm­ers of Cana­da main­tains that the sys­tem pro­vides farm­ers a pre­dictable and sta­ble rev­enue.” In an email, Lewandrows­ki wrote, The Cana­di­ans seem to be doing very well for the rur­al economies with their [sup­ply man­age­ment] pro­gram. Dri­ve around Ontario and you see pret­ty well main­tained farms with new equip­ment. Dri­ve over the bor­der into rur­al NY, and you see miles of emp­ty farms, barns falling down, and peo­ple strug­gling to live.”

Mike Eby, Board Chair­man of the Nation­al Dairy Pro­duc­ers Orga­ni­za­tion and a for­mer 7th gen­er­a­tion dairy farmer from Penn­syl­va­nia, says it’s nec­es­sary to con­trol the amount of milk in the mar­ket­place, but doesn’t believe it should or will come through gov­ern­ment inter­ven­tion. Instead, Eby thinks the solu­tion lives with­in dairy coop­er­a­tives, which cur­rent­ly rep­re­sent 80 per­cent of U.S. pro­duced milk, pri­mar­i­ly through mem­ber­ships with farmers.

Eby says, Either farm­ers con­trol the amount of milk they pro­duce, or the excess will con­trol the num­ber of farm­ers that pro­duce it… We look to the farmer and say you need to own this prob­lem as well, because if you can’t own the prob­lem, you can’t own the solu­tion. In order to own the solu­tion, your only hope in doing so is to uti­lize the coop­er­a­tive you already own.” Eby and his col­leagues say the coop­er­a­tives are in the per­fect posi­tion to mon­i­tor the mar­ket­place and ask their mem­bers to respond accord­ing­ly” by pro­duc­ing more or less milk based on demand.

While small and mid-sized dairies are going out of busi­ness, the num­ber of big­ger farms — includ­ing those termed mega-farms or con­cen­trat­ed ani­mal feed­ing oper­a­tions (CAFOs) — are grow­ing across indus­tries rang­ing from hogs to grain, tree nuts, veg­eta­bles, eggs, and dairy. And mod­ern agri­cul­tur­al pol­i­cy is shift­ing to favor these large pro­duc­ers by favor­ing anti-reg­u­la­to­ry poli­cies and award­ing the major­i­ty of farm sub­si­dies to the biggest and most lucra­tive oper­a­tions. Good­man main­tains that Wisconsin’s dairy farm­ers have been duped into pro­duc­ing too much milk” through expan­sion grant pro­grams, laws favor­ing large dairies, and a com­mit­ment by Gov­er­nor Walk­er to grow the state’s annu­al milk pro­duc­tion to 30 bil­lion pounds by 2020.

Addi­tion­al­ly, as proces­sors get big­ger, farms must grow to match the high­er demand, or leave the busi­ness alto­geth­er — a pres­sure ampli­fied last March, when Wal-Mart announced the con­struc­tion of their own dairy plant. The announce­ment result­ed in the sec­ond-largest dairy com­pa­ny, Dean Foods, abrupt­ly sev­er­ing con­tracts with more than 100 dairy farms in eight states. Farm­ers fear that Wal-Mart’s mod­el will grad­u­al­ly expand across the coun­try, edg­ing small pro­duc­ers out almost entirely.

In Jan­u­ary, the USDA report­ed that the num­ber of licensed dairy farms dropped to 40,000. This rep­re­sents a 3 per­cent decline in a sin­gle year, and a loss of 17,000 dairy farms — 30 per­cent — over the last decade. But while the num­ber of farms decreased, the num­ber of milk cows and milk pro­duc­tion increased. This dis­crep­an­cy rep­re­sents the con­sol­i­da­tion of the mar­ket, a restruc­tur­ing that has changed the face of agri­cul­ture over the last three decades. In a new report, the USDA found that by 2015, 51 per­cent of the val­ue of U.S. farm pro­duc­tion came from farms with at least $1 mil­lion in sales, com­pared to 31 per­cent in 1991.”

Good­man says the dairy cri­sis is hit­ting the small­er farm­ers much hard­er, as larg­er pro­duc­ers can often afford to weath­er peri­ods of low prices. Even if they’re get­ting paid less per hun­dred pounds of milk, they can just pro­duce more milk to make up the dif­fer­ence,” he says. And they’re rely­ing almost entire­ly on immi­grant labor, so they know they can pay a low­er wage, which also feeds into things.”

In an inter­view with Her­itage Radio Net­work, Lewandrows­ki said, I would like to ask the proces­sors: How do they ensure sus­tain­abil­i­ty for their farm­ers who sup­ply them? Most of the proces­sors pay rock bot­tom prices, and some of them have the farm­ers bid­ding down each oth­er. It’s kind of like Hunger Games for farm­ers.”

Lewandrows­ki and her sis­ter, who togeth­er oper­ate a 60-cow dairy, use the income from their off-farm jobs to sup­ple­ment their farm income. Lewandrows­ki works by day as an attor­ney, and her sis­ter is a large-ani­mal vet­eri­nar­i­an. I’m lucky I have anoth­er way to make mon­ey,” she tells me. All around her, neigh­bor­ing farm­ers are fac­ing increased stress and tough deci­sions dri­ven by a mar­ket with no rebound in sight. Just about every­one I know has an off-farm job, or is tak­ing on more debt.”

In her work as an attor­ney, Lewandrows­ki is inun­dat­ed with farm­ers.” They need help nav­i­gat­ing log­ging or hunt­ing con­tracts to make extra mon­ey, or sell­ing a piece of land, or get­ting released from their mort­gages. She helps with divorces and estate plans. I just had one farm liq­ui­date their whole herd,” she says, the surest sign that dairy farm­ers are fac­ing des­per­ate times.

Frus­trat­ed by the lack of sup­port for farm­ers, Lewandrows­ki has become a vocal pres­ence on social media. She uses it to ampli­fy the real­i­ties fac­ing rur­al com­mu­ni­ties and, specif­i­cal­ly, the stress being felt among dairy farm­ers. In April, she tweet­ed to her 25,000 followers:

Went to Wal­mart late at night. Kid at cash reg­is­ter told me he’s a dairy farmer, works the night shift to make $.”

I hang onto hap­pi­er days ahead. A farmer neigh­bor col­lapsed from stress today. We all went over to do the chores.”

Feel­ing very bit­ter today as every last farmer in my area strug­gles for their life.”

(“Amer­i­ca’s Dairy Farms Are in Cri­sis and the Farm Bill Won’t Help” was orig­i­nal­ly pub­lished on www​.talkpover​ty​.org, and is repost­ed on Rur­al Amer­i­ca in These Times thanks to their reuse policy.)

Deb­bie Wein­garten is a TalkPover­ty Fel­low, for­mer veg­etable farmer, and a free­lance writer based out of Tuc­son, Ariz. Fol­low her on Twit­ter @cactuswrenwrite.
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