Editorial: The Slow Destruction of Our Nation’s Dairy Industry

The Daily Hampshire Gazette, August 30, 2016, by the Gazette Editorial Staff.

The year 2016 shapes up as one of the worst for Massachusetts dairy farmers, a hallowed occupation being hollowed out by one of the most dire business climates in agriculture.

Norman Davenport’s family has produced milk in Shelburne for more than a century, defying the odds as thousands of state farms have gone out of business. Here’s what he told a reporter recently: “In a very short period of time, there’s no milk made in the state of Massachusetts.”

When and if that day comes, the reason for it – as well as the blame – will be clear. The federally imposed wholesale milk pricing system punishes producers in the Northeast, where production costs are higher.

These are indeed the “Forgotten Farms,” the name of a documentary film this year by Sarah Gardner and David Simonds.

Dairies this summer in the Valley are receiving roughly $15 for every dozen gallons of wholesale milk (a measure known as hundredweight), when their production costs are far higher – $21 for that same amount, according to a University of Massachusetts resource economist.

That doesn’t even include the cost of the farmers’ labor. “This year is going to be terrible. Horrible,” economist Daniel Lass told Richie Davis of The Recorder.

In the first six months of this year, 60 farms associated with the Agri-Mark dairy cooperative in New England and New York have gone out of business, prompting one of its economists to observe: “That’s huge. We can’t sustain that over time.”

Low wholesale prices this summer are reminiscent of an equally bad patch in the mid-2000s, when state lawmakers created a modest system of tax credits to help dairy farmers remain solvent. State Rep. Stephen Kulik of Worthington tried but failed to increase funding for that credit from $4 million to $6 million this year. Even that laudable program, which provides an offset to low wholesale prices a year later, only buffers the bottom line.

It doesn’t make whole the many farmers in a dying business who are losing money because federal bureaucrats have a big fat thumb on the scale.

Deerfield dairy farmer Peter Melnik of the Bar-Way Farm says prices this summer stand at what they were 20 years ago, pushing his farm’s income down by one-third. Big surprise: farm costs haven’t rolled back two decades.

Some desperate farmers understandably, but unwisely, produce more milk to make up for smaller checks. Then the government reacts to the presence of more milk on the market by reducing prices further.

These swings in prices whipsaw producers and make them masters of graveyard humor. Lucinda Williams of the Luther Belden Farm in Hatfield, when asked by the “Forgotten Farms” filmmakers to explain the pricing system, quipped: “There are only three people who understand how the price of milk is set. Two of them are dead, and the other one doesn’t remember.”

Kulik and other dairy advocates are seeking wider relief – in light of the national dairy production crisis – with pleas both to Congress and to the secretary of agriculture. But the odds of success are low, given that the federal pricing system has been beating up on dairies in the Northeast for decades with no relief from Washington, D.C.

The U.S. Department of Agriculture’s pricing system, according to Lass, the UMass economist, is calculated to drive down wholesale prices to benefit consumers and to push “less efficient” dairies out of operation. That may work on paper, but for farms across this region, it is simply a system that favors industrial farms over neighborhood ones — and the demise of this keystone agricultural pursuit is the result. Given this bad deal, operators of some dairy farms in the Valley have sought new retail markets, coming out from behind the wholesale curtain to connect with consumers, benefit from higher prices and join the local food movement.

If all dairies could pull that off, they could leave Washington’s strictures behind. But even small dairy farms produce tons of milk a week; direct sales to consumers simply aren’t possible.

Dairy farms have also fought to reduce energy costs, often with the help of grants from a state that understands what the federal government does not: county by county, dairy farms are essential players in the agricultural economy. They keep equipment vendors in business. They work landscapes that might otherwise return to brush, or be sold for development, forever foreclosing on the farm dream.

If and when the last of our dairies go, and it seems only a matter of time, we will have lost something priceless.