Dairy in Crisis – Part 4: State’s agricultural landscape changes as number of dairies dwindles
By KATHRYN FLAGG
ADDISON COUNTY — Faced with record-low milk prices, 24 dairy farms in the state have gone under since December, according to the Agency of Agriculture. Two of those farms were in Addison County — bringing the county’s total to 170.
Ten years ago, Addison County boasted 321 dairy farms.
It’s not unusual for three or four farms in the county to go out of business in the course of a year, according to Craig Miner, the executive director of the local Farm Service Agency office. But he said he wouldn’t be surprised if the county saw more than usual this year.
“(Farmers) are getting less than half what they were getting for their milk last spring,” Miner said. “You can imagine what the dairy producers are going through.”
Meanwhile, the number of farms in the state is actually climbing, as more small vegetable farms and other diversified farming ventures crop up, according to “Vermont in Transition,” a report put out in December by St. Michael’s College.
This is all to say that farming, as Vermonters have long known it, is changing.
“We’re hearing about several smaller operations looking into other types of agricultural income — vegetables, maple syrup, value-added type products like cheeses,” said Miner. “I am hearing more inquiries about some of these types of things.”
But, Miner pointed out, the farms filling the void left by Vermont’s dwindling dairy farms aren’t necessarily run by the same people who left the dairy business.
“It’s not easy to turn a 200-dairy cow operation into a different type of operation. … It’s difficult to turn on a dime and make a major change like (that),” Miner said.
And as Rep. Will Stevens, I-Shoreham, pointed out, Addison County’s predominantly clay soils — which make for fine dairy farming — might not allow for the large-scale transition to vegetable farming.
This all begs the question: what will the changing landscape of agriculture in Vermont look like as more dairy farms close, and what role will the dairy farmers of today play in the agriculture industry of tomorrow?
SELLING THE COWS
Bridport farmer Paul Wagner sold his cows in 2006. He and his father came to the farm in 1968, but just shy of four decades later, Wagner decided to get out of the business.
He remembers the price he made for his milk, right down to the last penny, when he bought the farm from his father in 1979: $15.30 per hundredweight (cwt), with 35 cents deducted from that price to cover shipping, advertising and other costs.
In 2006, though, he was making $12.06 per cwt, with a 68-cents deduction. The numbers just didn’t pan out, Wagner said, and since none of his three children wanted to go into farming he didn’t see any need for going into debt.
“You know, I just couldn’t do it anymore,” Wagner said. “(The farm) wasn’t large enough.”
Selling his 68 cows — and giving up the profession after 40 years — came with its own share of “emotional problems,” Wagner said, but he didn’t dwell on that.
“Business is business,” he said. “You have to project the future. That’s what I did. I’m a realist.”
These days, 61-year-old Wagner, who still owns 300 acres in Shoreham and Bridport, does a little work for neighbors. He also raises heifers for another farmer, but he’s looking to get out of the business completely soon. He keeps 12 beef cows — and his younger son plans to take over the operation as a hobby beef farm and “play farmer.”
For many dairymen — who, on average, are 54 or 55 years old, according to Vermont Secretary of Agriculture Roger Allbee — getting out of the business is the first step toward retirement, though heavy debt loads associated with keeping the farm going can make getting out hard.
Wagner sold his cows — but other dairy farmers opt for the occasional herd retirements offered through Cooperatives Working Together, an organization known as CWT.
Under the CWT system, participating farmers pay into the system, deducting 10 cents per cwt from what they earn to feed the CWT pool. Periodically that money is used to buy out farms. The goal is to bolster the price of milk by cutting back the supply.
The program is voluntary, but CWT announced this month that it has signed up a “supermajority” — two-thirds — of the milk supply for the next two years.
In 2008 the CWT program culled over 50,000 cows throughout the country. In the Northeast, 22 farms retired their herds, and nationwide the herd buyout was responsible for keeping 976 million pounds of milk off the market. As a point of reference, total U.S. milk production in 2008 was estimated to be just shy of 190 billion pounds.
The date of the next round of herd retirements has not yet been determined, but farmers are already talking about when CWT will begin accepting bids for participation.
Weybridge farmer Nate Miller retired his herd through the CWT program around three years ago. His cows were still productive, he said, but they were too old to sell.
“On paper, nobody wants an 11-year-old cow,” Miller said.
So he put in his bid to CWT, and then got the call: his bid had been accepted. That meant that the CWT program would pay Miller roughly $4.30 per cwt of milk for a year’s worth of production, but that his herd would have to be taken out of production.
Shortly after Miller got the news, a broker appeared at his farm and tagged Miller’s cows as animals slated for beef. Next, beef processors arrived and took the cows away. On top of the per cwt bid price that Miller earned, he also received the price at which the cows were sold for beef.
At the time, he said, it was the right decision for his farm. Now, he’s not so sure.
“I tend not to dwell on the past too much,” Miller said. “It worked at the time, so I’ll say it was a good decision.”
VERMONT IN TRANSITION
As farms like Wagner’s and Miller’s close up shop, Vermont’s landscape is shifting. Just as the number of dairy farms in the state shrinks, non-dairy agricultural enterprises are on the rise. Since the early 1980s, the number of non-dairy farms has increased by just over 800 farms to approximately 4,900 farms, according to “Vermont in Transition.”
These are typically small operations. Roughly 40 percent of these farms have sales that come in below $2,500 a year, and nearly half of the farmers in the state do not list farming as their principle occupation. Meanwhile, direct sales to consumers and more profitable value-added products still account for a small portion of farm sales, but this sort of business is making up an increasingly important source of revenue for small farmers.
Still, according to legislators like Stevens and Rep. Chris Bray, D-New Haven, diversification is an important part of keeping Vermont’s rural character intact.
Stevens’ own Shoreham farm is an example of the type of diversification that is taking place across the state. He and his wife, Judy, run Golden Russet Farm, an organic vegetable, flower and herb farm. They bought the farm, a former dairy operation, in 1984.
Stevens said that building a large vegetable farm in Addison County is a difficult prospect, in large part because of the Vergennes Clay soil distributed throughout the county. Searching for his own farm, he said, took six months, and soil samples became the limiting factor in the hunt.
Stevens is nevertheless optimistic about increasing diversification of the county’s farmlands, in part because vegetable farming is just one avenue farmers could pursue, he said. Another option could well be growing biofuels like switchgrass or willows.
But diversification, Bray said, does not come without growing pains.
“As you talk about diversifying, I think we need to be very careful to respect and honor the successes that our conventional agricultural economy has delivered to Vermont and continues to deliver,” said Bray, a member of the Vermont Milk Commission. “I think part of what happens is people who are in traditional or conventional farming feel that there’s a criticism of how they’re working as people talk about new types of agriculture.”
Bray, a proponent this legislative session of bills that would support local foods networks and biomass studies, said that the apparent choice between traditional dairy farming and a new, diversified approach to agriculture is a false choice.
“We have room for and opportunity for every type of farmer going forward,” Bray said.
In fact, Bray said the state will need to support traditional agriculture moving forward, in part because of the vast economic infrastructure the industry supports in the state.
A dairyman’s decision to get out of the business has effects that reach beyond the farm, and some Addison County residents worry about the impact that a hard season on the dairy farm — or the decision to pull out of the business — could have for the rest of the community.
Specifically, dairy farming — responsible for between 80 and 85 percent of the state’s gross agriculture sales — requires an extensive network of support industries in feed supply, equipment repair, veterinary medicine and other farm services.
“There’s no question that when farmers have less net income, they have less money to spend,” said Jim Bushey, co-owner and partner of Bourdeau Brothers, a farm supply and feed store in Middlebury. “We all do business with dairymen. These dairy businesses influence everybody’s welfare. It’s a major, major impact to the community.”
Bushey said that it’s not just prices that are down — milk production in the state is, too. January production in Vermont was down 5 percent from the year before, according to Bushey.
Right now, he predicted total revenues from the farm could be down 40 or 50 percent from where they were a year ago.
And that’s not just problematic for businesses like his in the farm supply industry.
“If we don’t get the business here, the next thing you know, the employees don’t get the hours,” he said. “It just goes downhill. It just follows right down the business stream.”
For the most part, dairy industry experts are cautiously optimistic about the long-term outlook for farmers, despite the current low milk prices.
One silver lining, according to Allbee, is that federal officials have started to pay attention to the milk crisis.
Last week, the USDA moved 200 million pounds of nonfat dry milk from the Commodity Credit Corporation to the USDA’s Food and Nutrition Service. Those milk products will now be distributed to foodbanks and emergency assistance programs — and, USDA officials hope, start rightsizing the oversupply of milk on the market.
Allbee said the move hasn’t had an impact on the price of milk being paid to farmers — and that, in the scheme of things, 200 million pounds of milk “wasn’t a huge amount.”
“But having said that, what’s positive about that is that USDA Secretary (Tom) Vilsack recognizes that some of this surplus needs to be moved,” Allbee said.
Meanwhile, Miner said that checks from the federal Milk Income Loss Contract program would start going out next week. And while the $1.51 per cwt reimbursement for February’s milk won’t solve all of dairymen’s woes, he hopes the assistance will help.
Allbee said that the dairy crisis comes back to one glaring problem: the pricing system is broken, he said, and works primarily against farms in the Northeast. Vermont farmers are penalized because of overproduction in western states.
But Allbee said that for the first time, “collective recognition” of the problem has set in.
“This is the first time I’ve seen that collective enthusiasm across the country,” Allbee said.
Closer to home, there’s a certain degree of optimism in the industry among some farmers, too.
Miller, who sold his herd through the CWT program three years ago, spent a few years working for the Dairy Herd Improvement program as a records specialist. But now, he said, he plans to get back into the business this fall.
He’s not especially worried about the downswing in milk prices.
“They are what they are right now,” Miller said, adding that in order to survive a dip in prices farmers should not go wild during high milk prices.
So Miller is building up his 40-cow herd again, and hopes to start milking again in October.
It all boiled down to “the realization that that’s what I love to do,” he said. “That really fit and worked well for me.”
Editors’ note: This week’s chapter in the “Dairy in Crisis” series wraps up our four-part series. You can read the entire series online at www.addisonindependent.com, where you can also view a photo slideshow of all of the photographs that appeared with these articles.
Though the series wraps up our in-depth coverage of the current milk price crash, the Independent will continue to cover stories about the dairy industry and agriculture in Addison County, and we invite you to contact us with the stories you think deserve to be told. Contact reporter Kathryn Flagg at 802-388-4944 or [email protected]dent.com.