What the Farm Bill Means for Small Dairy

Has America Stopped Squeezing the Dairy Farmer?

by Jason Velazquez - Pen and Plow Farm

The Farm Bill has passed, despite a pretty rocky year of negotiations. Rather than celebrate that Congress achieved something (anything), however, some in the media are, predictably, focusing on a potential economic hardship caused by a potential rise in the price of a gallon of milk. And based on the comments I’ve read beneath article after article, many Americans either don’t have a clue about what it takes to get a gallon of milk on the store shelves (likely), or they think that somehow the increase in retail milk prices means that dairy farmers are getting filthy rich.

What people should understand is that the Farm Bill that just passed change the way farmers are protected from wild fluctuations in the market in a momentous way. In a sense, the burden of protection has been shifted to the farmers themselves through the creation of insurance policies that farmers will need to purchase. In a sense, it’s the Affordable Dairy Care act, though in truth, the premiums are apparently going to be subsidized in part, and the coverage is not mandatory.

I recommend reading this article in the Journal Citizen and another article by AgWeb if you want to know what’s changed after 70 years of subsidies and price supports. You might be surprised at just how much common sense and the common good trumped crass greed and self-interest.

And that last thing is what’s got my nose out of joint. I’m losing patience with the dolts who cannot swallow an increase of any size in the price of food, attributing it always to farmer greed.

Darwin Clarke, a local dairy man who died in 2012, told me a few years ago that he’d make more money doing just about anything else besides dairy farming. “I need to make $17-$18 dollars per hundred weight just to break even,” he explained to me. “What am I supposed to do now? The co-op is paying me less than $12. I’m paying to farm. That’s what I’m doing.”

It is true that programs out of the USDA helped to make up the difference, but Darwin’s costs were immediate. Caring for his herd couldn’t wait on a government check. Even now, the $23 per hundred weight (farmers are paid per units of one hundred pounds of milk—milk weighs about eight pounds per gallon) doesn’t solve immediate problems of cost.

As David Doak told the Bangor Daily News, “The price isn’t the problem right now, it’s the input,” including not only feed, but fuel costs, veterinary care, and all the other incidentals. The prices of all these inputs have risen disproportionate to the prices farmers receive for there milk.

These inputs have always threatened to break farmers. In December of 1976 farmers were paid $10.30 per hundred weight (CWT), while they had watched their inputs go up over 190% in ten years, according to the National Agricultural Statistics Service. The prices of all agricultural prices since the 1960s are available for online viewing for anyone who wants to see the economic reality faced by the majority of the last two generations of the nation’s farmers.

And this is right about where Dean Pierson comes in. Almost exactly four years before the passage of the Farm Bill, Mr. Pierson walked into his barn with a long rifle and killed 51 of his milking cows with bullets to their heads. Then he sat down in a chair and put a bullet through his own heart. He left alive the heifers and dry cows because, not needing to be milked, they would not suffer in his absence.

Among the explanations that his family and friends provided for his actions was the bitter and simple truth that Dean Pierson came to the desperate conclusion that he was milking himself into the poorhouse.

His coffin was, apparently, transported to the graveyard on a flatbed trailer pulled by his tractor. Heartbreaking in its poetry.

Tragically, Dean Pierson was not alone in his his suffering. Many farmers responded to the last several years of economic hardship the same way.

So we’re all good now, though, right? The price is up to around $23 CWT from $17–$18 last year at this time. Not hardly.

The passage of the Farm Bill with its revolutionary changes to the way dairy farmers will deal with price fluctuations is a great start. But let’s look at the numbers for a minute. Let’s say that a dairy farmer needs to have a gross personal income of $50K / yr. to provide for himself and his family.

Dairy farmers say that they need to make a profit of $8 per CWT. We’ve already mentioned that a gallon of milk weighs about eight pounds, so that puts about 12.5 gals. to the CWT. A typical Holstein gives about 8.75 gals. of milk a day.

Our farmer would need to earn $136.98 per day to meet his $50K goal, which means that he needs to milk 24.5 cows (okay, so one of them didn’t eat her Wheaties that morning) each day. But, wait—a cow is typically dried off two months out of the year, so that means he has to own 30 cows (or 29.4 cows if they will agree to a partial lease option) just to make the $5.60 profit per cow per day.

And he still has to feed those five recuperating cows for two months, And cows eat a lot. A whole lot.

I don’t know exactly how the profit margins are typically calculated for the dairy farmer. I don’t expect that the inputs take into consideration the unexpected breakdown of a tractor that requires an $800 visit from the dealership just to plug into the onboard computer and find out what’s wrong. Or the day of work lost because some feisty heifer knocked the farmer into a gate panel and he had to keep ice on his back for eight hours.

I just know that the margins are atrociously slim when a dairy family breathes a sigh of relief because one cow can earn them $4 a day more than she did last year.

So I hope that more people pay more attention to what’s actually in the Farm Bill. They might actually be proud to pay another $0.50 a gallon at the checkout line. They might realize that they maybe saving more than a farmer’s livelihood—they may be saving a farmer’s life. The farmers I know tend to believe that they are working as hard as they do in the service of their neighbors and their nation.

For the rest of the public to believe that we’re selfish for wanting to live just a little bit above poverty while we toil would indeed be almost to depressing to deal with.