Low milk prices push small dairy farms out of business

Marketplace Contributor Jun 13, 2012

Low milk prices push small dairy farms out of business

Marketplace Contributor Jun 13, 2012

Kai Ryssdal: You think of that perfect Vermont dairy farm and you probably picture a red barn and rolling green hills. Yeah, that picture’s not so perfect anymore. Low milk prices mean a lot of those small family-run operations are going out of business. And farmers who do stick with dairy are finding there’s only one way to survive.

Melody Bodette reports from Vermont Public Radio.

Melody Bodette: When a family decides to get out of farming, they need to sell their cows. So, dairy auctions are more common these days. This one is in the town of Franklin, right on the Canadian border.

Jon Lussier: All right there you go… isn’t she lovely? $1,500.

Three years ago milk prices hit record lows. Then prices doubled. Now they’re falling again. Auctioneer Jon Lussier says the return to low prices makes it hard for small farms to survive.

Lussier: The price of milk is going down the forecast doesn’t look good because everything else is so high, fuel and fertilizer — so high right now.

The costs of running a farm are rising, while farmers are getting paid less for their milk. Many farmers took out lines of credit to keep operating, but as prices fall again they’re unwilling or unable to borrow more. And as farmers get older, working long hours, seven days a week, becomes harder. So many farmers are simply selling the cows.

Shane Hoague: They’ve worked hard, they’ve got a nice farm, beautiful animals, but you know, you can only work for free for so long.

Shane Hoague got out of farming last fall. Now he’s a bystander at the dairy auction. He blames the constant fluctuation of milk prices, which made it hard to set a budget. It also scared off loan officers when he tried to increase his herd size. But giving up the dream of owning a farm was difficult for Hoague and his wife.

Hoague: It almost tore the family apart. I wanted to keep going, to keep plugging away, and my wife knew it was time to get out. I didn’t want to accept that fact.

Many Vermont dairy farmers say that with low milk prices you have to get bigger to stay in business. The state still produces the same amount of milk, but there’s a smaller number of farms with larger herds, like Amanda St. Pierre’s Pleasant Valley Farm in the nearby town of Berkshire.

Amanda St. Pierre: Mainly it’s just an economy of size. You can do things a little cheaper per cow than you can on a smaller dairy.

In the last 15 years, St. Pierre’s farm has grown from 100 cows to 2,000. She says getting bigger does have advantages.

St. Pierre: It’s a lifestyle thing. Smaller dairies you work, work, work, work 24 hours. we put in a lot of work here, but we’re able to offset it with more employees.

But even big farms feel pinched when milk prices fall. St. Pierre says while her farm may be one of the largest in Vermont, but it’s small compared to dairies in California.

St. Pierre: The West Coast really is flooding the market. They’ve put in place tight supply control measures that hopefully we’re going to see that affect our price here in Vermont.

Even if milk prices start to go back up, it will be too late for the small farmers who made the decision this spring to get out of the dairy business.

In Northwestern Vermont, I’m Melody Bodette for Marketplace.

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