Clean water, low milk prices put dairy in a bind

JAY — Dairy farmers have a role in the water quality debate in Vermont, but they might not survive to participate in that debate if market pressures continue as they are.
These conclusions could be drawn from presentations at the Jay Peak resort last week, where, after state officials opened the Agency of Agriculture’s Northern Tier Dairy Summit on Monday, three work groups were invited to present abridged versions of their reports to the 150 dairy farmers and many others in the audience.
The first of those workgroups, the Vermont Dairy and Water Collaborative, presented their call to action studying the intersection of stabilizing agriculture and improving water quality in Vermont.
“We all know the importance of ag in this state,” said Mark Magnan, a dairy farmer from Fairfield and one of five farmers in the collaborative working group. “I also think we’re all here today because we know the importance that ag plays in water quality.”
Per their report, farmers’ roles in land stewardship meant that, through conservation-minded practices, farmers could positively impact their respective watersheds.
At the same time, however, that role is threatened by increasing costs of production, depressed milk prices and “an overarching consumer expectation that food should be cheap” — market forces compounded by global competition and regulatory pressures, according to their report.
A second group, represented by the University of Vermont Extension’s director and former Vermont Secretary of Agriculture Chuck Ross, sought to start “a conversation on the future of agriculture,” namely its viability under current market conditions and the implications of a struggling dairy economy on rural Vermont.
“It reflects an ongoing conversation that a number of us have in the state of Vermont,” Ross said. “We had a conversation that we thought was significant enough that we wanted to put it on paper and share it with the rest of the state.”
That “conversation,” held between members of UVM Extension and a number of other Vermont-based economic and agricultural organizations, is now organized through the Vermont Farm to Plate Network, the organization charged by the legislature with implementing a statewide food plan.
Diane Bothfeld, the Agency of Agriculture’s Director of Administrative Services, followed with a sprint through the report of the Vermont Milk Commission, which concluded that the best means for addressing the ongoing depression in the dairy economy was through a mandatory nationwide supply management program.
“‘Growth management.’ ‘Supply management.’ Those words have been brought up in the past, but right now they’re being talked about more and more across this country than ever before,” Bothfeld said. “The issue is too much milk and the inventory of dairy products impacting the prices paid to dairy farmers.”
Like the other reports before it, the Milk Commission warns that a continued loss of dairy farms would dramatically impact their respective communities, where the loss of a dairy farm could spill over into other businesses and, the commission hypothesized, ultimately erode the community.
The report from the Vermont Dairy and Water Collaborative lists several recommendations for addressing what its authors envision as a “dual crisis” in both the struggling dairy industry and the conservation of Vermont’s waterways.
While the collaborative makes several recommendations relative to water quality, the most dramatic of their recommendations was for an ecosystem services program to compensate farmers for possible positive environmental impacts.
Since coming before the legislature earlier this year, the possibility of a program for compensating farmers for ecological services –— services benefiting the environment, such as the mitigation of stormwater runoff — has gained traction in Vermont, even working its way into a general agricultural “housekeeping bill” currently being reviewed by the Vermont Senate’s Committee on Agriculture, H. 525.
Magnan shared the podium with David Mears, the executive director of Audubon Vermont and a former Commissioner of the Vermont Dept. of Environmental Conservation. Like Magnan, Mears is also a member of the collaborative.
“We also recognize that you are committed stewards of the land and that, frankly, if we’re going to address many of our environmental issues, especially water quality in this state, we need you to be part of the solution,” Mears said to applause. “A well-run farm… is one of our greatest assets on the landscape in terms of protecting the environment.”
Mears summarized the report’s recommendations as “aligning… new markets, incentives, financial mechanisms and regulations together in a way that collaboratively gave opportunities for farmers to make choices that protected the environment and allowed them to make a good living off the land.”
“I’m glad that we, as dairy farmers, are at the table with this talk on water quality,” Magnan added. “I don’t know any farmers out there that don’t want to improve the land that they’re on.”
The Future of Agriculture report presented by Ross is straightforward with its pessimism.
“We anticipate that a combination of unfortunate market forces and a generational transfer of assets will transform our agricultural sector in the next decade, in many ways that Vermonters will not like,” the report reads.
While the report focuses namely on the conventional dairy industry, it notes that other sectors of the agriculture industry — vegetables, livestock and organic dairy — are sharing similar market challenges.
Ross was blunt about the implications, which echoed many of the conclusions presented by the other two work groups presenting at Jay: farms provided ecological and economic benefits, and the loss of those farms could dramatically impact the state’s future.
“If we see this trend going forward, the concern is we’re going to wake up… to a different Vermont,” Ross said. “One where our economy is fundamentally eroded, one where our communities are not as strong as they were before and one where the culture of this state is different than where it was today.”
Their report came to many of the same conclusions as the Vermont Dairy and Water Collaborative’s did, endorsing an ecological services program akin to those promoted by the collaborative among other more generally defined goals.
Ross, however, warned there would be no single answer for salvaging the agriculture industry, which is why he and others are encouraging members of the agricultural community to participate in the Farm to Plate Network’s future conversations. “There’s no silver bullet to this problem,” Ross said. “It’s going to take many of us working on many solutions to make progress.”
Ross said their working group was looking to have a formal list of recommendations drafted by next December.
The Vermont Milk Commission was convened under legislative orders to explore a supply management program as a possible answer to the primary driver for economic collapse in the dairy industry: a five-year oversupply that’s left federally-governed milk prices below the cost of production.
As previously reported in the Messenger, the Vermont Milk Commission hinges stabilization of the dairy industry on a mandatory, nationwide supply management program that would charge farmers for producing milk above a certain threshold.
Such a program would likely require federal orders overseen by the USDA — an explicit recommendation of the Vermont Milk Commission. “It can’t be done in just the state of Vermont,” Bothfeld said. “We make a lot of great milk, but nationally, we’re too small.”
While previous attempts to build a supply management program were squashed at the national level, and while the sitting U.S. Secretary of Agriculture recently dismissed supporting a national supply management program, the implementation of a supply management program has become an increasingly popular answer to stabilizing a nationwide glut in milk production among farmers themselves.
Just last Saturday, during a “Faces of Dairy” forum held in Enosburgh, farmers representing both conventional and organic farms advocated explicitly for a supply management program to reel in overproduction in the dairy industry.
According to Bothfeld, a supply management program remains the clearest answer for eating into the U.S. dairy glut. “We’ve got… 1.3 billion pounds of cheese in storage,” Bothfeld said. “How are cheese prices ever supposed to come up with that much cheese in storage?
“We can’t eat our way out of it, we can’t export our way out of it.”

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