As prices and demand drop, and financial pressures grow, dairy farmers increasingly leave the business

Jason Lawhorn milked cows on Dante Carpenter's farm in Russell
County, Kentucky. (Photo by Bill Estep, Lexington Herald-Leader)

After several years of low milk prices that often don't cover operating costs, many dairy farmers are leaving the business. Nationally, the problem is overproduction; fewer Americans are drinking milk, which has cut demand in all states.

In Kentucky, more than 10 percent of dairy farms shuttered in 2018, lowering the count to 513, down from 1,400 in 2005, Bill Estep reports for the Lexington Herald-Leader. "In August 2017, one measure of milk prices in Kentucky, the “mailbox” price, was $18.63 per hundredweight; a year later, it was $15.82, according to the U.S. Department of Agriculture," Estep writes. That's down from nearly $26 in 2014. Kentucky farmers are at a disadvantage because the federal government subsidizes the transport of milk from other states into Kentucky for sale, Estep reports.

The nonprofit Farm Aid says the milk-pricing system is controlled by large dairy corporations and unfairly hurts consumers and small dairy farmers; the organization points out that the number of very large dairy farms has increased in recent years as small farms have been pushed out of the market. "Farm Aid pointed to Walmart’s new Indiana processing plant as a example of large players taking over more of the milk-supply chain. Large companies with processing plants typically would rather deal with a few large farms than many smaller ones," Estep reports. "More than a dozen Kentucky dairy farms lost their sales contracts in 2018 when Walmart decided to build its own processing plant in Indiana and stop buying processed milk from Dean Foods, which in turn announced it would close a plant in Louisville."

Dairy farmers can get USDA relief payments as part of the larger package aid authorized to help producers hurt by the trade war, but the National Milk Producers Federation says the payments are "less than we had hoped for."

Many farmers just can't weather the storm. In a grim op-ed for The Washington Post, organic dairy farmer Jim Goodman writes that he sold his Wisconsin herd this summer after 40 years of milking: "My retirement was mostly voluntary; premature, but there is some solace in having a choice. Unlike many dairy farmers, I didn’t retire bankrupt. But for my wife and me, having to sell our herd was a sign — of the economic death, not just of rural America, but also of a way of life. It is nothing short of heartbreaking to walk through our barn and know that those stalls will remain empty. Knowing that our losses reflect the greater damage inflicted on entire regions is worse."