October 19, 2011 —
Dairy farmer Joe Davitt, a third-generation Waymart dairy farmer, is having a rough year, like many other area dairy farmers. “The weather since the spring, with nearly 60 inches of rain, killed us,” he said. “We couldn’t plant as much as we wanted and we didn’t get nearly enough hay cut.”
Davitt showed me his hay maw, which was only half full. “This is usually filled to the top,” he said. But that’s not all. He, like all small dairy farmers in Northeast states, aren’t making nearly enough on the milk they produce by the sweat of their brows.
You only have to spend a small amount of time to see him sweating, milking his 40 cows twice a day; packing away expensive bales of feed; driving his tractor, in need of repair, out to the fields with hay for the herd to eat; and doing the myriad of chores that make up a dairy farmer’s day.
Most small farmers have piled up debts because of the low prices they have gotten for their milk for the last five or so years. “We had some relief just this year when the price we got was around $22 to $23 per hundred weight (per cwt),” he said. “We hear that the price is going down again to $15 or $16.”
Davitt doesn’t fault the coops like Dairy Farmers of America (DFA) for the low price. “They aren’t the ones that determine the price as much as the Chicago Mercantile Exchange (CME), which constitutes the milk market for the nation.
“I have to keep the cows outside since I don’t have a big barn like the mega-farms do,” he said. “When cows are outside in wet weather like this, their milk is not of high quality so I get a loss there.”
The direness of the situation is reflected in the number of dairy farms that have gone out of business. According to Ed Pruss of the Cornell Cooperative Extension, the number of dairy farms in Wayne County has dropped from a high of 400 in 1980 to around 80 in existence now. Some say that the real number has fallen to around 50.
Brian Smith, once a dairy farmer, now the chairman of Wayne County Commissioners, said he heard that the coops and the haulers are supposed to charge small farmers an additional fee if they can’t produce at least 2,000 pounds of milk every two days when the hauler comes.
“That additional cost, added to the costs that they already have, will really put them deeper in the hole,” Smith said.
“The continued decline in the value of manufactured dairy products, which will result in substantially lower prices to dairy farmers, clearly indicates that dairy farmers deserve a new pricing system to cover their continued increase in operating their farms,” said Arden Tweksbury of ProAg, a tireless advocate before Congress for dairy interests.
Enter U.S. Senator Bob Casey with his new legislation to come to the rescue.
On Wednesday, October 12, Casey introduced the Dairy Advancement Act to ensure Pennsylvania dairy farmers are well positioned to compete in the global dairy market.
“This is a common sense measure that will help Pennsylvania dairy farmers better meet consumer demand while providing farmers with choices to manage risks,” Casey said. “By simplifying the system and rewarding innovation, our farmers will be better prepared to compete in today’s marketplace.”
The new bill would give dairy producers a choice in risk management tools by allowing them to continue to participate in the Milk Income Loss Contract (MILC) program or to receive support for the Livestock Gross Margin-Dairy (LGM-Dairy) program by insuring their revenue margins for future months.
The latter is basically a crop insurance policy and, like any insurance policy, it pays them when losses exceed their profits. Many dairy farmers have spurned this kind of insurance by stating that they don’t want insurance. What they want is a fair price for their product—milk—like any business receives.
An item that appeared in past legislation put forward by Casey and Senator Arlen Specter last year, which included the farmers’ cost of production as determining the new pricing system, is absent in this new legislation.