Milk Matters (Original Version)

By Claire Morenon, CISA Program Coordinator. Edible Pioneer Valley published a shorter version of this piece in June 2015 — see it here. Read this version for additional comments from dairy farmers Lucinda and Darryl Williams of Luther Belden Farm.

One of the things that makes “buy local” efforts so successful in the Pioneer Valley is the relatively straightforward message. When you hear “Be a Local Hero, Buy Locally Grown,” it’s easy to understand how you can do that – vibrant farmers’ markets, farm stands, and CSAs enable you to buy your fruits, veggies, meat, and more directly from the farmer who produced it, and restaurants and retailers are doing an ever-better job of sourcing and labelling local products. The line between the agricultural land surrounding us, the people who work it, and the food on your plate is straight and easy to follow.

But where do local dairy farms fit into this picture? Considering the regulatory and financial hurdles to processing milk on-farm, we are truly lucky to have local dairies that are producing cheese, yogurt, ice cream, and their own bottled milk for sale directly to consumers. But those hardy few represent just a sliver of the dairy industry in Massachusetts, and the story of the rest of dairy farming in Massachusetts is mostly invisible to even the most well-informed shopper.

The first task is to understand why this even matters. In Massachusetts, dairies make up less than 2% of all farms in the state, according to the Massachusetts Dairy Promotion Board and the 2012 Ag Census. It’s closer to 3% in the Pioneer Valley, but dairy farms steward 18% of agricultural land and account for 14% of agricultural sales. Translation for the number-phobic: dairy farms have an enormous impact on land preservation, the agricultural economy, and everything else that a healthy agricultural system means for our community.

For a host of historical and practical reasons, most of the dairy farms in the state sell their milk wholesale. We’re still talking about a local product here – milk that travels through wholesale channels remains within the region. A Manomet Center study showed that Massachusetts farmers produce nearly 20% of the milk consumed within the state, and those numbers go up when you think New England-wide. According to the USDA, Massachusetts dairy farms produced 230 million pounds of milk in 2013, and wholesaling their milk frees them from having to process and market that huge volume of milk individually. As Darryl Williams of Luther Belden Farm in Hatfield says, “Dairy farming is already a 24-hour-a-day job,” so the case for a wholesale dairy industry in the state is clear.

The problem is the pricing. The wholesale price for raw milk is set on a federal level using a deeply complex system, but the important thing is that the price farmers receive for their milk is only tenuously connected to the price you pay for milk at the grocery store. That’s because raw milk is turned into a wide range of commodity products (like butter, nonfat dry milk, cheese, dry whey, ice cream mix, and so on), so the price paid to farmers is based on how demand for each of those commodities interacts with international supply, and is set by bidding at the Chicago Mercantile Exchange and some federal price support programs.

In recent years, wholesale prices for dairy have stagnated, creating a serious gap between the cost of milk production and the amount farmers are getting paid for their milk. The consequences of this have been severe, especially in Massachusetts, where costs, from land and equipment to labor and feed, are higher than they are elsewhere in the county. Lucinda Williams, also of Luther Belden Farm, says, “Dairy farmers are the only ones along the chain who have no way to absorb increased costs. Consumer prices don’t reflect the cost of production, and there’s no opportunity to cut our losses when working with livestock, because the animals need to be fed and cared for, and the milk keeps coming, even when the price doesn’t reflect our costs.”

CISA, in partnership with UMass, recently conducted a study to determine the actual costs of production for dairy farms in the state of Massachusetts. You can see the breakdown (in the graphic), but the takeaway is that the average cost of production per hundredweight is $25.87, and if you add in unpaid family labor and other non-cash costs, the full economic cost to farmers per hundredweight is $33.28. The average price paid to farmers at the time of the study was $21.53 per hundredweight. With an average herd size of 119 cows producing 25,846 hundredweight per year, this difference compounds very quickly for Massachusetts dairies. The state and federal governments, recognizing both the value and the challenges of dairy, have implemented stopgap programs like the Dairy Farmer Tax Credit Program and the Dairy Margin Protection Program, but these are not permanent solutions.

So what can conscientious consumers do about all this? Well, this is one time that we don’t have a snappy recommendation. Wholesale dairy pricing does, even with these complicated mechanisms, reflect consumer demand, so we can all don our milk mustaches and drink more milk. Various advocacy efforts, from establishing “Right to Farm” communities to pushing for a more localized system of price supports, can help our dairy farms stay afloat. “Up until people stop drinking milk, I think there’s a future for the dairy industry here,” says Darryl. “We are committed to making a wholesome, high-quality, healthy product, always.”