Dairy farmers battle low milk prices, high cost

Ken Quick looks down the road and sees the past of dairy farming in Washington County.

Up the road in either direction from his family farm and all around the area Quick said small dairy farms used to populate the landscape.

“They used to be all over the place; Hebron, Granville, over in Vermont,” he said.

Although the recently announced drop in retail milk prices spells some good news for the consumer’s food budget, it is bad news for dairy farmers.

Talk of the peril faced by farmers is nothing new to Quick.

“It’s like a cycle. Every time the price of milk goes down, a few more small farms close,” he said.

The price milk in the region fell to $13.42 per 100 pounds in February, continuing a downward spiral started in January when it dropped about $5 from January. Overall, the price of milk has dropped some 40 percent from a year ago, according to U.S. Department of Agriculture statistics.

The falling costs of milk on the retail market illustrate one aspect of a dairy farmer’s conundrum, when those who sell milk in the stores can’t get a good price they can’t pay a good price for the wholesale milk they buy from farmers. Low prices in the supermarket mean tough times for farmers.

Quick said that because of the way milk prices are managed the highs never get that high for the producer. A $4 gallon of milk was not making him huge amounts of money.

The highs also tend to be short lived, he said. The lows sometimes last, “it’s just a matter of how low they go,” he said. 

Recently some action has been taken in Congress when senators, including New York’s Chuck Schumer, called for efforts to bolster the price of wholesale milk through government purchase of milk and cheese for school lunch programs.

With more than 170 dairy farms, Washington County is certain to see the impact of the closure of any small family farms in a state that trails only Wisconsin and California in milk production.

The New York State Farm Bureau said 500 small farms across the state were casualties of the last time prices were this low back in 2005.

They report it was likely this dip in prices would close the doors on additional farms.

Quick said he could recall a number of times when low milk prices caused farms to close, but his farm was able to keep operating and he said he expected to keep it that way.

The family has been on the county Route 30 site of Foxfield Farm since the 1960s and the site itself has been a farm for longer than anyone can remember, he said.

With the price of a gallon of milk at Stewart’s Shops selling for $2.79 retail, Quick said he receives less now for his milk than what it costs him to produce it.

Industry projections show the price rebounding later in the summer months, but Quick said the projection he had was older and could have changed quite a bit.

The projected low of $13.48 has been surpassed and the anticipated rebound could come later, if it comes at all.

Currently the price of what is referred to as hundredweight or 100 pounds of milk is just over $11 while Quick says his costs to produce that much milk is about $18. Breaking even is one thing, Quick said, but losing money for everything he produces can’t go on forever.

“How long would you keep going to work if you had to pay to go?” he asked.

Fixed costs such as those for fertilizer to grow crops and insurance remain constants. Quick said that as a small farm with fewer additional costs, he has some advantage when enduring periods of low milk prices.

The farm is family operated, Quick said, he doesn’t hire help so he doesn’t have to worry about selling more milk to cover all of the costs associated with employing farmhands.

Quick, along with brother Doug, and his son Ken Jr. work the farm on their own.

The price of milk might have been better a year ago, when the price of a gallon of milk in the stores was over $4 per gallon, but it was hardly a boom time, Quick said.

Accompanying the higher milk price were high prices for feed and fertilizer driven by high fuel costs.

Fuel costs have come down, but the cost of feed and fertilizer remain high. Experts said the weak dollar helped to drive the price of milk up as foreign markets could afford milk products from the United States. That emerging demand has diminished since the world financial crisis began. 

Quick said he also sells cows, a revenue stream that other farms might not have, but those who would be in the market for his cows are themselves struggling dairy farmers.

Quick said the sales can help, but in the current market it might take the sale of two animals to equal what he paid for one back when he bought them.

Dennis Parker at Parker Hill Farm said he planned to keep on producing milk. Although the future looked bleak, he said the farm had a long history he thought he could keep going. Parker said he would at least consider borrowing to cover the farm’s costs to try to ride out the tough times, but it became a matter of how much he could afford to borrow versus how long the current trend lasts.

Parker said his farm was well over 100 years old and he expected to be able to keep it open

“But it’s hard, it’s very difficult,” he said.

Despite the tough times and uncertain future, Quick said he considers himself an optimist,

“You kind of have to be to be in this business,” he said.



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