Save N.H.’s dairy farms

Our dairy farmers are in trouble. Every time they milk a cow, they are losing money. It is not just a New Hampshire problem; it is a nationwide demise of the dairy industry.

The current price that a farmer in the Northeast receives for milk is between $10 and $12 per hundred pounds of milk (11.6 gallons). Break-even averages are about $16.94, and recently have been as high as $18 just to cover costs. It does not take a mathematician to see that our dairy farmers can’t continue like this.

Not only is the price the farmer receives for his or her milk way down, but the price of feed, corn, fuel and fertilizer are up significantly.

Milk prices have been on a roller-coaster ride for years – up as high as $20 per 100 pounds and down as low as $9.50. The last time the prices were high, so were costs – so the farmers could not save any money.

Right now, the average farm in New Hampshire is losing $3 per cow per day. If the average New Hampshire farm is milking 110 cows, then the typical dairy farmer is losing $110,000 per year. One farmer told me his feed bill last month was more than his dairy check. Can any of us sustain that? I think we will lose 25 percent of our dairy farmers this year.

Losing our local dairy farms has three bad implications.

First, it is our source of fresh, wholesome, good-tasting local milk. I don’t think we want milk dehydrated, trucked thousands of miles, reconstituted and sold as fresh milk.

Second, many of our 130 remaining dairy farms are generational farms. Farms that have been in the same family for more than 100 years are not uncommon. They are often the keystone industry in their community, supporting churches, the feed store, tractor dealer and the veterinarian.

Third, when dairy farms stop growing corn and hay to feed livestock, they usually start using “growing houses.” Say goodbye to open space.

How did we get here?

Farmers don’t set the price that they receive for their milk. Consumers don’t set the price they want to pay for milk. It is set by the federal government.

The price is a result of a complicated milk market order system that is broken. The price is supposed to reflect supply and demand but also the price of large volumes of cheese and powdered milk on the Chicago Mercantile Exchange.

This archaic system has been in place since the Great Depression and does not factor in the cost of production.

Demand for U.S. milk is down because exports of cheese and powder are down in the recession. Supply is up a little to boot. The average output per cow is up 2.2 percent, and the number of cows is up 1.2 percent. A few percentage points does not seem like a lot, but combine it with imports of foreign milk powder that the big processors are getting cheap, throw in reduced foreign demand and they say we have too much milk.

There is another wrinkle in this saga. In 2007, farmers were underpaid for their milk because of a reporting error at the U.S. Department of Agriculture. The feds admit to the error but have not paid the money owed and apparently don’t plan on rectifying the error.

What can we do?

First, we need an immediate bailout for New Hampshire dairy farmers – $3 million should do it. The state or feds need to come up with this one-time shot to keep them in business. Then, we need to get the USDA to pay the reparations for the reporting errors. Finally, we need the USDA to review the Milk Market Order System and fix it to include a cost of production factor.

These guys are in trouble – not because of anything they did but because the federal pricing system does not work. The price of milk to the farmer is down about 45 percent, but the price to the consumer is only down 21 percent. Somebody is making money at the expense of the farmer.

Republican state Rep. Bob Haefner of Hudson is a member of the House Environment and Agriculture Committee.