Paul Keppler of Knox, N.Y., stands near a young bull at his farm.
He sold his dairy cows after milk prices dropped so low that he
couldn’t make a profit, and now is selling hay and corn instead.
(Photo by H. Rose Schneider, Altamont Enterprise)
For The Rural Blog
American dairy farms are facing one of the worst market crises in two generations. Faced with reduced consumer demand and a glut of milk (largely due to increased production by industrial megafarms), independent family dairies are getting paid about the same for their milk as they were in the 1970s and 1980s — but paying 2019 prices for fuel, feed, utilities, equipment, and other needs.
The U.S. Department of Agriculture estimates that more than 2,700 dairy farms went out of business in 2018, nearly half of those in three of the nation's biggest dairy states: Wisconsin (590 dairies shut down), Pennsylvania (370), and New York (280).
For the Democrat, freelancer Kathy Daley wrote a series of articles about local dairy farms after six of them received cancellation notices from the Connecticut processor who had purchased their milk for years. The first article in that series, "Dairy farms get pink slips," has since been expanded to a half-dozen articles by Daley and several more by the newspaper's staffers.
Daley grew up on suburban Long Island, but remembers visiting New York state's dairy country as a child. During those family vacations, she remembers walking to a nearby dairy farm to watch the milking -- "every day," she recalls. But she knew little about the realities of farming after she moved to Sullivan County more than a decade ago and started writing for the local newspaper: "I didn't even know what a heifer was when I started."
"When the town supervisor asked me to write something about the plight of the dairy farms, I spent weeks online researching everything I could about the dairy industry," Daley said. "I didn't want to sound like an idiot when talking to these farmers."
Her research revealed just how complicated and challenging dairy farming game can be. "I love these people so much. They are so smart -- farmers have to be veterinarians, mechanics, accountants, everything." But the spiritual connection those farmers have to their cows, and their land, also impressed her. "These people don't want to leave their land. Many of them are third or fourth generation dairy farmers. It's just who they are. it's in their bones."
Once home to more than 400 dairy farms, the rural county about 100 miles northwest of New York City now has only about a dozen family dairies. The local economy has shifted from agriculture to tourism and vacation homes (the recently opened Resort World Catskills casino has also sparked local growth). The county has initiated a number of farmland-preservation initiatives, including a shift from commodity farming to niche, "locavore," and hobby farming, Daley noted.
A new local creamery is in development that could increase demand for local milk, but that project is still two or more years from completion. "The farmers are thinking, 'Something that's happening in two years sounds good, but what about now? How do we feed the cows now?'" Daley said. Some of those farmers may find other milk buyers and be able to hold on a little longer, she said, but others may give up dairying, or even sell their land for development.
Farther upstate, in the rural, western edge of Albany County, the Altamont Enterprise's H. Rose Schneider profiled the last days of one of that county's last family dairy farms, the Keppler family farm near the small town of Knox.
Schneider got a tip that the family was selling its herd of Holsteins from a co-worker who saw a posting on Facebook by Cheyenne Keppler, the 22-year-old daughter of farm owner Paul Keppler. "It seemed very compelling," she said, "because she was clearly very upset about the situation and didn't know what the next steps would be."
Cheyenne Keppler's post was excerpted in Schneider's article: "You who vowed to buy local products — and then went to Walmart to get your dairy and produce. You who asked what can we do to help. You talked a big game. We waited. We tried for years to come out on top. We waited for you to save us. You failed us. You failed every small farmer across the country. Now we watch every last cow get loaded into a trailer.”
Schneider's feature focused not just on the emotional toll on the Keppers, but on the economic realities that are driving the Kepplers and so many other family dairy farms out of business.
"Keppler said that he was paid about $15 per 100 pounds of milk (roughly 11 gallons of milk) before he decided to close the farm. It’s the same price that his parents were paid during the 1960s and 1970s, he said. The difference being, of course, the cost of everything else, he said, including feed for the cows ($1,200 a month), diesel for the tractor ($3 a gallon), and the tractor itself ($50,000 to $70,000)."
The current dairy crisis started in 2015 after 10 years of growth — between 2004 and 2014, U.S. dairy exports more than quadrupled, and the U.S. became the world's third-largest dairy exporter after New Zealand and the European Union, according to the USDA. Market shifts in 2015 caused a 30-percent drop in the value of U.S. dairy exports, although that began to rebound in early 2018 — in fact, 2018 was a record-setting year for U.S. milk production, despite reduced demand. The surplus of milk, along with reduced consumer demand, has driven on-farm prices to record lows.
The surplus has been exacerbated by the trade policies of President Donald Trump. For example, by pulling out of the Trans Pacific Partnership in early 2017, the Trump administration nixed a potential $1 billion increase in annual U.S. dairy exports. Trump's threats of a "tariff war" with Mexico (and fear of retaliatory tariffs against U.S. products) led dairy industry leaders in June 2018 to formally demand Trump avoid those tariffs, stating in part: "Mexico accounts for approximately one quarter of foreign demand for Made-in-America dairy products and is our most reliable trading partner." The administration's attempts to replace the North American Free Trade Agreement with a new trade deal would likely benefit large-scale U.S. farm operations that are set up for exports, but some analysts doubt the revamped trade deal would be of much help to small-scale family dairies.