With attention on fiscal cliff negotiations in Washington, D.C., a group representing family farms and rural groups brought attention Tuesday to a problem facing dairy farmers nationwide. Congress is considering a Farm Bill that could address the situation. The previous national agriculture plan expired Oct. 1.
Several local members of the farm community agreed there is a problem.
The National Family Farm Coalition, based in Washington, D.C., held a teleconference, allowing five people in the dairy farm community around the country to discuss the problems they are facing with the cost of production exceeding the price they are paid for their product.
This included Joel Greeno, of Kendall, Wis., who milks 48 cows on a 160-acre farm. His family has been in farming for more than 100 years, but he was the only member who hasn’t been forced out for financial reasons. That has led him to want to “fix the dairy crisis.”
Gretchen Main of Waterville said her farm has 50 milking cows.
“Farming has always been a hard occupation, and it keeps getting harder,” she said. No business can survive without at least earning the cost of production for its products, she said.
According to a letter the Farm Coalition sent to senators last month, the federal Department of Agriculture said in September that farmers were paid an average price of $19.60 for 100 pounds of milk. The agency reported the average cost of production for that milk is $28.50 per 100 pounds.
The cost of production varies from region to region, Delaware County Cornell Cooperative Extension educator Mariane Kiraly said. Feed is the biggest expense, with corn and soybeans at or near record prices. For example, she said the price of corn was about $180 a ton, and the price of soybeans was $300 a ton in 2009. Recently, the price was $410 and $450 respectively. An average Holstein will produce about 100 pounds of milk a day at the peak of production, she said. It will eat about 33 pounds of grain and other feed.
Although the price of milk has gone up since 2009, when it fell below $13 for much of the year, the feed increases have left the farmers in no better a situation.
“It’s the same slim margin,” she said. If the Farm Bill is not passed by Jan. 1, prices could revert back to legislation from the 1940s that would set milk prices at $38 a hundredweight. She said she doesn’t think that will happen.
But “if Congress wants small regional farms, it has to create something that will work for everyone.”
Walton dairy farmer David Stanton milks a herd of 55 Holsteins. He described the situation as “a losing proposition.” He has a towing and excavation service to help make ends meet. His wife drives a school bus to provide health insurance. Even so, with the current pricing, “I’m right at the edge all the time,” he said.
Despite that, he still enjoys farming, but he needs to earn $22 to $24 per hundredweight “to make a go of it.” A farmer with more debt would need about $28, he said. He would like to see other inequities addressed, such as farmers paying for trucking and high salaries for milk cooperative executives.
He agrees with the Farm Coalition, that the “margin insurance” proposal in the Farm Bill that would address part of the cost of production, paid by taxpayers, is inadequate. It should be replaced with a plan that is based on making sure farmers receive 100 percent of their costs from the industry, he said.
Without that, “I’m not sure what is going to happen here,” he said.
Danny Buel of Franklin milks about 50 Holsteins. There have always been problems in the industry, but the high cost of feed has been a recent issue, he said. He is not really sure what can be done to help, but pegging the price a farmer receives from producers to the cost of production would be helpful.
He said he doesn’t expect much from the Farm Bill when it is passed, but “we will get by,” he said.