Monday, July 02, 2018

NBC sums up the plight of small dairy farmers; U.S. has about than a tenth of the dairy farms it had 40 years ago

NBC News chart based on U.S. Department of Agriculture data
More than 42,000 dairy farmers have gone out of business since 2000, "casualties of an outdated business model, pricey farm loans and pressures from corporate agriculture," Phil MacCausland reports for NBC News. "There were nearly 650,000 dairy farms in the U.S. in 1970, but just 40,219 remained at the end of 2017, according to the U.S. Department of Agriculture. Cows are producing more milk than ever, but they’re consolidated on bigger, more efficient farms. In 1987, half of American dairy farms had 80 or fewer cows; by 2012, that figure had risen to 900 cows."

MacCausland makes it current: "Small dairy farmers, an aging population, were some of the last U.S. holdouts against the farming industry’s pressure to grow or die — but it’s unclear how much longer they can last. Hope grew when President Donald Trump tweeted support for the dairy industry in early June at the G-7 meeting in Canada, but experts and farmers say Trump mistakenly focused his ire on trade and tariffs rather than an American industry that is increasingly hostile to small-time operators."

For four years, wholesale milk has sold for less than the cost of production, MacCausland reports: "Low milk prices set off a cycle in which farmers produce more milk to ensure they’re bringing in enough money to operate, leading to dairy products flooding the market and prices plummeting still further. Even when the price of milk rises, however, the cycle doesn’t end — farmers keep milking as much as they can to cash in before the price drops again. It’s a never-ending catch-22 of competition that is running dairy farmers aground."

MacCausland's object example is a group of more than 100 farmers in Kentucky and adjoining states who had to sell out when Walmart canceled a contract with Dean Foods, the only processor willing to buy their milk. (Walmart built a processing facility in Indiana.) Nine of them recently "made a handshake deal" with Scioto Milk Producers of Ohio, but the co-op doesn't need as much milk as Dean did and won't pay as much; also, the farmers will also have to pay to ship the milk to a processing plant in West Virginia. One farmers, Dan Sammons, told Kate Talerico of the Louisville Courier Journal that "Most of us will be losing money," but the deal could let them stay in business until the market improves.

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