Falling milk prices hurting dairy farmers
The prices that farmers receive for milk has dropped about 50 percent this spring, causing many problems for local dairymen.
“Last year, the price was $24 for 100 pounds,” Walker Fitch, of Milford, said recently. “It’s now about $11.32.”
One problem is, Fitch said: “They say the cost to the farmer to produce a hundred pounds of milk is $17. That $17 is a break-even figure. There are a lot of us in trouble because we’re paying last year’s high fertilizer and fuel costs.”
The drop in prices “caught us by surprise,” he said. “We had good predictions.”
Kevin Pomeroy, of Mont Vernon, said the main problem lies with the federal government, which sets the price of fluid milk based largely on action in the Midwest, where farms are much larger and cheaper to run than in rocky New England.
“The price is based on the commodities market in Chicago,” Pomeroy said. “The biggest unfair part is what we get paid, but we don’t set what the big stores sell it for.
“I read in the paper where Dean Foods made record profits last year,” he said of a large national chain. “The government should regulate them. The pricing system has to change in order for the farmers to survive.”
Fitch agreed: “It makes you wonder what the head honchos are doing. And it’s not just the small farmers – the big ones are hurting, too.”
Fitch and Pomeroy market their milk through Agri-Mark, a dairy cooperative.
Dairy farms throughout the country are complaining. The Connecticut state Legislature, for example, is considerable a bill that would give dairies some financial support, while Missouri is considering a $25,000 tax break for each of its dairies.
Northeast dairy farmers were protected to some extent until 2001 by the Northeast Interstate Dairy Compact, which set the wholesale price of milk for the region, separate from the rest of the country. It was dissolved partly because of concern that it hindered the free market, and efforts to re-create this compact have been unsuccessful.
Under the present system, “The big stores can manipulate the market,” Pomeroy said.
But both farmers said they were in the business to stay.
“We’ll hang in there,” Fitch said. “We’re not ready to give up yet. I’m in it because I love it, but you’d like to be able to pay the bills.
“It’s frustrating. When the price is high, you pay off the bills, fix the barn, do things that should have been done before. In this business, you can’t stand still; you have to keep progressing.”
Farmers may soon get a break, according to a report from the Brattleboro Reformer in Vermont, which said the U.S. Department of Agriculture has transferred 200 million pounds of nonfat dry milk to the federal nutrition program.
The transfer is expected to relieve what experts call an “overabundance of dairy products in the world supply,” which is driving down the price farmers get for their product, the report said.
Fitch said that last year, “They said the price was high because we were exporting” a lot. And now, “We aren’t exporting as much.”
Fitch and Pomeroy said they expect the price to go back up eventually, but, “It will be a rough summer,” Fitch said. “I’ve just barely paid the fertilizer bill. A lot of guys still have to buy seed.”
“I think we’re being farmed by the government,” Pomeroy said. “The federal government has to get out or control (the product) to the end. They can’t just keep us from getting a good price.”
Fitch said, “We have absolutely no say in what we get paid. When you go to the mailbox to pick up your check, it’s like Christmas – you have no idea what’s there.”
But, Fitch added, “We’ve been here for five generations, and we’ve always survived. The cows will be here.”
Pomeroy is a fourth-generation farmer on his farm. He, too, expects to stay around.