About a year and a half ago Dan Weed had to sell his cows and focus on a different type of farming.
“You can’t make a living milking cows anymore,” said Weed, a fourth-generation farmer in New Milford.
Farmers across the country are selling their dairy farms as production costs continue to outpace the actual price of milk. But the recent federal budget approved last month could offer much needed relief with more than $1 billion included for dairy farmers.
The budget also restructures the Margin Protection Program, an insurance-style tool that allows farmers to pay into the system and then receive a benefit if a certain margin is hit with milk prices dropping below the production costs.
These changes and the additional funding are welcome news for many dairy farmers, who think there could be a better chance to receive a payment for milk production losses between January and August.
“It looks like it might be something worthwhile to sign up for now,” said Ben Platt, a ninth-generation dairy farmer in Southbury.
A struggling industry
Platt said he doesn’t want to rely on an insurance program, but this is the fourth straight year his family business has seen costs exceed milk prices.
“It will definitely help but it won’t make up for the losses people are seeing on the farm,” Platt said.
It costs the Platts about $19 to $20 to produce 100 pounds of milk and the U.S. Department of Agriculture has set the price of milk at about $13 for that amount. Platt said the industry has fluctuated over the years but the price now is about the same as it was when Jimmy Carter was president in the late 1970s.
Fuel and feed costs have all gone up, contributing to the rising production costs. Supply and demand in the global market, meanwhile, has driven prices down.
“I hope we can at least cover some of the losses,” Platt said. “It’s a help, but I wish we could get paid a fair price for our milk.”
He said larger farms are expanding their production everywhere to help offset their costs. The dairy industry in general is oversaturated with product, which is making it difficult to get good prices.
Smaller operations tend to close or switch to another type of farming.
“There’s dairy farms selling left and right all over the country,” Weed said, noting there’s only about 120 dairy farms in Connecticut.
He said it’s gotten so bad that the dairy farming co-op he belongs to sent its members phone numbers for suicide prevention. He said the suicide rate is high among dairy farmers who have to work long hours, 365 days a year and end up losing money.
“It’s very depressing and it shouldn’t be that way,” Weed said. “Any federal help will help.”
“Everyone’s optimistic it will turn around,” he added.
Once that happens, Weed also plans to go back to dairy farming, selling his milk locally.
A broken system
In the meantime, government programs were established to help close the operating gap.
But farmers have criticized the MPP as an ineffective tool where farmers paying into the system weren’t actually seeing the benefits the program was created to give out, said Henry Talmage, the executive director at the Connecticut Farm Bureau.
“It fell short of what it was designed to do,” he said, noting the changes included in last month’s budget could help. “It’s a move in the right direction.”.
Among the changes is a reduction of the premium costs by nearly 70 percent for small and medium sized farms and making more farms eligible for these lower premiums. It also changes the payment calculation from bimonthly to monthly to better reflect the market. The MPP’s $100 administrative fee is also waived for underserved producers, such as beginning farmers, veterans and socially disadvantaged farmers, according to a press release from U.S. Sen. Chris Murphy, D-Conn., who advocated for changes to the program.
Shortly after the budget passed, Murphy touted the improvements, but also acknowledged more work was needed.
“The changes included in the budget deal are great news for Connecticut’s dairy producers,” Murphy said. “Falling milk prices have hit farmers in my state hard, and these policy reforms and financial investments will help them start to pick up the pieces.”
Still, MPP revisions, while welcome, weren’t needed as drastically in Connecticut where there is a state program to help dairy farmers.
That state program was established in 2005 with the passage of the Community Investment Act. The act uses funds collected through records fees to ensure there’s money to reimburse dairy farmers for losses, as well as funding for open space, farmland preservation, historic preservation and affordable housing.
“That program has helped keep Connecticut farms in business better than some other states,” Talmage said.
Connecticut’s dairy producers contribute nearly $1.3 billion and 4,286 jobs to the state annually, according to Murphy’s release.
“However, farm milk prices are forecasted to drop in 2018, and Connecticut’s already struggling dairy farmers would be in dire straits without immediate federal action,” Murphy’s release stated.
By: Katrina Koerting
Source: The News-Times