Pour out the milk, or go bankrupt?

By Cassandra Morrissey
The current dairy industry is in a crisis. Milk prices are so low that farmers face a tough decision; sell their milking cows and find a new career or continue losing money each month. Hundreds of dairy farms across the country have already been forced to decide. Some claim bankruptcy, leaving them with cows they can’t sell and farms that are not profitable. Although others, such as Lance Rovers, hold out hope for a profitable future.
Lance Rovers is a dairy farmer in Chazy. He has been in the industry for over 30 years and has seen the industry price of milk fluctuate greatly.
“Milk prices started out around seven or eight dollars per 100 pounds. I’ve even seen it get as high as 22 dollars. But right now, it’s about 12 dollars,” Rovers said.
The main reason for the milk crisis is due to a supply and demand struggle. As farms across the country continue increasing in size, the supply of dairy products continues increasing. Farms are milking more cows and producing larger quantities of dairy products. Although, the demand for the products is shrinking.
Richard Redman, the district conservationist for the United States Department of Agriculture blames part of the shrinking demand on more choices available for consumers.
“Instead of drinking milk, people are choosing water or soda. Not many families sit down anymore and have a glass of milk at supper. Instead they are on the go and grab a Coke at a fast food place,” Redman said.
Another cause for decreasing demand is due to the current economy. Although the market is struggling, the US dollar still has a higher value then other currencies. This is leading to fewer countries buying American exports.
In 2007, the United States had a prospering dairy market, and farms drastically increased production. Eventually, there was a surplus of dairy products, resulting in a steady demand but increasing dairy availability. Farms in the country no longer had a national market and began looking towards foreign markets. But, countries such as New Zealand and Australia already began to monopolize foreign dairy industries. According to Emily Myers, the dairy educator at the Cornell Cooperative Extension, the United States only exports about 10 percent of its dairy products with foreign countries supplying the rest.
As the supply and demand struggle continues, production cost within the country continues increasing. According to the United States Department of Agriculture, dairy farms especially large farms, rely heavily on hired labor, purchased feed, electricity and shipping cost, which all factor into extra cost for the farm.
Harry Fefee, President of Franklin county Farm Bureau realizes everything is connected.
“All farms are of kind of hurting, but dairy farms in particular. Exports are down, production costs are up, feed cost are up, all the taxes in New York State are up, it’s just getting too expensive for some farms to continue producing,” Fefee said.
These factors are leaving dairy farms struggling to make ends meet. Rovers’, whose farm milks over one thousand cows, is losing over 80 thousand dollars a month.
“It’s a lot of money we are losing, but we aren’t in financial debt too bad yet. We will be able to hold on this down turn, but every down turn you have, you lose strength, and finally you end up cashing in,” Rovers’ claimed.
Jake Swyers has been co-owner of the Adirondack Dairy Farm for eight years. He has seen the highs and lows of the market, but he also has hope for the future.
“We hope to continue to do business as usual. We are trying to cut production cost and save money, but it’s getting tough. The market can’t take this much longer,” Swyers said.
Currently the milk prices are set by the government through detailed formulas. Although, the formulas do not incorporate the cost consumers are paying at the store, the supply and demand changes, and the overall profit. Representatives are trying to find ways to help dairy farmers, but it’s not overly successful. Senator Charles Schumer is trying to push direct payments to dairy farms to help pay for production cost, but its still in the workings in Washington. State Senator Darrel J. Aubertine introduced a legislation that allows farmers to keep up to two dollars more per hundredweight. Finally, a recent bill was signed by President Obama, which gives $350 million to help dairy farmers.
“In the long run, the dairy industry looks good. But right now, they are going through times where $350 million spilt between hundreds of farms won’t be overly helpful. It’s tough for people to agree on a solution, but if something is not done soon, farms will go under,” Myers said.
“I defiantly see my future in farming, but the biggest thing will be getting back the milk market strength. The forecast for the value of milk is supposed to get back, but some are already forecasting it will be down by next fall again. I guess all you can do is hope,” Rovers’ said.