CHARLOTTE — Clark Hinsdale III’s family has been farming on Vermont’s soils for seven generations in Addison and Chittenden counties.
A week ago (March 21), he auctioned off his herd of 250 milking cows, his farm implements and tools, his four robotic milkers and all the agricutural trappings of a lifetime in the dairy industry at one of Vermont’s most iconic dairy operations.
The auction was fair to middlin’, Hindsdale said. Cows averaged $900 each and the four robotic milking units he installed more than a dozen years ago sold for $100,000 (new units sell for $180,000 each.) The crowd was “massive,” Hinsdale said, but “90 percent of the people didn’t bid on anything. There were less than a dozen active bidders on the cattle and most of the cows were purchased by larger farms. There were farmers who were there to check prices with selling out themselves in mind.”
ICONIC FARM
Hinsdale’s Nordic Farms, a symbol of Vermont’s dairy prominence and heritage, sits atop a prominent knoll in Charlotte just south of the Shelburne line on Route 7 overlooking Lake Champlain to the west and Camel’s Hump and Mount Mansfield to the east. Its bright red roof on a massive, snowy white barn with the Green Mountains as a backdrop has provided a visual clue (however mistaken that might have been) of the vitality of the dairy industry.
But the past three years of depressed milk prices have taken their toll on Vermont’s small to mid-size dairy farms.
“Dairy farms with under 500 cows are over,” proclaimed Clark Hinsdale at his office in the white, two-story farmhouse in front of the dairy barn a day before the auction. Standing in this socks, jeans and plaid button-up, long-sleeve shirt, the six-foot-tall man in his early 60s who has spent the better part of 40 years advocating on behalf of dairy farmers, explained some of the economic forces that are making farming so difficult in today’s market.
For a dairy farm similar to his 250-300 milking herd that had been roughly valued at $3 million, every dollar decline or rise in the hundredweight price of milk is worth about $70,000, he said. Back in 2014, dairy farmers were doing well with prices near $24 per hundredweight. Prices today, however, are just under $15 per hundredweight, with breakeven costs ranging from $18 to $22 per hundredweight, largely depending on the size of the farm and the advantages of bulk purchasing and scale. That difference — from $24 per hundredweight to $15 per hundredweight — represents a swing of $630,000 annually at an operation of Nordic Farm’s size.
With labor costs being a key component of profitability and finding labor just another formidable challenge that faces dairy farmers, Hinsdale had been among the first to install robotic milkers at this dairy 14 years ago. While they certainly made a difference, he calls the system obsolete now because the size of the farm is obsolete.
Hinsdale had sold his farm operation to Michael LaClair back in 2014, just before milk prices started their decline. The farm went into bankruptcy in 2017, and Hinsdale took over the operation.
“I’d been holding on for the past few years, but the hole I was digging just kept getting deeper and deeper,” Hinsdale said, explaining that larger farms (1,000 cows and bigger, named LFOs, for Large Farm Operations) could save $2 or $3 per hundredweight because of the advantages of scale. That advantage, he says, is one of the reasons consolidation in the industry was proceeding so rapidly.
But even at $15 per hundredweight LFOs would be struggling as well.
And prices for raw milk have been down for the third straight year, with 2015 seeing a significant drop from the high prices of 2014, and then further drops in price in both 2016 and 2017. The price farms get for their milk doesn’t look any better in 2018, farm experts agree, prompting Agri-Mark Farmers Cooperative to send suicide prevention information along with its membership newsletter just a few weeks ago following the suicide earlier this year of one of its members.
GOVERNMENT HELP?
Some help, however, is on its way within the next few weeks via the federal government’s Margin Protection Program. Vermont’s Secretary of Agriculture Anson Tebbetts encouraged area farmers to at least take a look at the program to see how it might help them, even though similar programs in the past have not always been beneficial.
“It’s not going to be for everybody,” Tebbetts recently told WPTZ’s Channel 5 reporter Brian Colleran, “but I encourage all farmers to take a look at this to see if it can help them. And the important thing is that it will happen in the next few weeks and (you will) not have to wait until the farm bill is completed.”
The 2018 farm bill under negotiation in Congress may include a provision called the Dairy Farm Sustainability Act. As proposed by New York Sen. Kristen Gillibrand, this would set a base price for milk at $23.34 per hundredweight; if the price falls below that threshold, eligible farmers would get 45 percent of the difference. But that’s speculative legislation that could change or might not meet approval by a majority of either the House or Senate, or get approval of the president. It is, at the least, an uncertain solution.
What is certain, Hinsdale says, is that more and more dairy farms are being stressed by low milk prices and more conventional dairy farms will likely go out of business.
“Three dairy farms in Vermont have already auctioned off their herds so far this year,” Hinsdale said, “and you’re going to see a lot more come this April and May.”
Part of the problem, Hinsdale noted, is that the typical three-year cycle of dairy prices is being elogated by the very advantages larger farms have. Because their scale allows them to produce more milk at a lower break-even cost, the price cycle may see a four-year or longer period before prices recover.
DOWNWARD TREND
It’s all part of a trend that has seen Vermont’s dairy farms decline over the past 70 years. In 1947, Vermont had 11,206 dairy farms, compared to 1,046 in 2009, and just 796 dairy farms in 2017.
It’s a trend Hinsdale knows well through his advocacy on behalf of the dairy industry for three decades, including as president of the Vermont Farm Bureau, director of the American Farm Bureau Federation, director and chairman of Farm Family Insurance Companies, and director of Yankee Farm Credit, ACA. In those years, he’s helped craft farm legislation to try to stabilize the dairy industry and provide a fair price to dairy farmers — a sometimes elusive goal that has Hinsdale worried.
Of Vermont’s fewer than 800 remaining dairy farms, Hinsdale says the average number of milking cows per farm is about 125, while on the other side of the coin, there are about 25 to 30 Large Farm Operations with more than 1,000 cows. In more specific numbers, he says about 29,000 cows are with LFOs, with the remaining 70,000 cows of Vermont’s roughly 100,000-cow dairy herd scattered among Vermont’s 750 smaller farms.
“I hate to say it, but there’s no future for the family farm in Vermont,” Hinsdale says, “but there may be a future for the ‘families farm,’” meaning farm families that join together to form larger operations.
In the meantime, the auction at Nordic Farms will not be the end of the useful life of the farm buildings and the 600 acres of land around the farm, which is protected in the Vermont Land Trust.
“I’m not sure what we’ll do next,” Hinsdale said, though he hopes the dairy would become home to some new ag venture, perhaps as “a very nice malt house in the near future,” as he mused in a post to the Vermont Farm Bureau.
But getting to that next step hasn’t been easy.
“I feel like a wounded deer that has escaped the hunter,” he said of auctioning off his cows and farm equipment. “The bleeding will stop and I’ll live for better days.”