Dairy is an economic development issue for Pennsylvania, according to the state’s Secretary of Agriculture Russell Redding.
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Brian Nailor, of Mechanicsburg, Pennsylvania, clips his milking shorthorn calf, Lucy, Jan. 7 at the Pennsylvania Farm Show, in Harrisburg. (Rachel Wagoner photo)

“You can’t talk about agriculture in Pa. without talking about dairy,” Redding told Farm and Dairy in an interview.

Dairy Dilemma: An Interview with Russell Redding from Farm and Dairy on Vimeo.

The state’s dairy industry generated an estimated 52,000 jobs and $14.7 billion in economic activity in 2015, according to the Pennsylvania Dairy Study, which we’ll talk more about in a bit. That’s why the state has spent so much time studying and investing in the industry.

It all started after Redding came into office in May 2015. He says around that time, they saw the storm clouds on the horizon for the dairy industry. They needed to act. But they wanted solid data to back up their actions.

“We thought we should have a more strategic view of what to do with dairy,” he said. “One, what do we have to do to be competitive? Are we competitive now? And two, to be competitive, what do you have to invest in?”

It started with the Pennsylvania Dairy Study, which began in early 2017. The year-long study surveyed nearly 1,000 dairy farmers, sifted through piles of data, took feedback from people throughout the dairy industry and compared Pennsylvania farms to similar states, just to name a few things. 1

The dairy study also built on a broader report on the economic impact of Pennsylvania agriculture. That one was put together by the Temple University Fox School of Business and Econsult Solutions and released in January 2018. 2 All of that grew into the Pennsylvania Dairy Development Plan, released in August 2018. 3

“Rather than just saying dairy was important to us,” Redding said the study and subsequent plan gave them a leg to stand on and plan of action.

Most recently, Pennsylvania established the Dairy Future Commission to take a hard look at the industry and make recommendations on how to strengthen and improve it. The commission is made up of government officials, state legislators, dairy farmers and processors. The group first met in September 2019. It’ll report back to the legislature in August.

Brett Reinford, chair of the commission and a dairy farmer from Juniata County, gave an update on the commission’s progress at the state Senate Majority Policy Committee meeting Jan. 7, during the Pennsylvania Farm Show. Based on the ideas he’s heard so far, Reinford said the commission is going to bring forth “some bold recommendations.”

“We’re not just looking at what can the legislature do for us, but what can the industry do for itself,” Reinford said.

Show me the way
One of the first, and arguably the biggest, impacts of the plan was investing $5 million to create the state-level grants for dairy producers.

The Dairy Investment Program provides funding in four key areas: value-added processing, organic transition, research and development and marketing and promotion. The grants require a 15% cash match.

Redding said they identified those four area to focus on but didn’t know what to expect. The farmers and processors applying soon made it clear where their interests were — cheese.

The recipients of the first round of grants were announced in March 2019; 29 projects were funded out of 42 applicants.4 Of those, 22 were for value-added processing, or taking milk and processing it into a higher value product like cheese, yogurt or butter. Five were for marketing and two were for research and development projects.

The grants went to a wide range of producers, from helping a woman with a 25-cow herd get started processing fermented dairy products to helping an established commercial creamery expand its operations.

Sue Miller, owner of Birchrun Hill Farm, in Chester County, is using the grant to expand her cheesemaking operation. She started making cheese over a decade ago at a neighboring farm’s vacant facility. They later built a facility at their farm, where they started making cheese in October 2018. She said they had been looking for a way to add value to their milk and not rely so heavily on the commodity milk market.

“I literally woke up one morning and thought, ‘I’m going to learn how to make cheese,’” Miller told Farm and Dairy. “’Maybe that’s it. Maybe that’s the answer.’”

The transition to cheese has enabled her sons to come back to work on the family farm. They both studied dairy science at Cornell University. Miller said they’ve been growing their operation incrementally and responsibly, building their customer base and product line.

“If we wouldn’t have started down this path, we probably wouldn’t be on the farm right now,” she said. “I don’t see how we could’ve done it with the dairy economy the way it is.”

Cheese might not be the answer for all dairy farms. But Miller urges smaller farmers to be open to possibility

“You have the opportunity to be nimble. You’re not burdened like a big, giant ship. Sometimes it’s hard to make a navigation shift when you’re big,” she said. “There’s no one way to farm. There are many ways to do it right, to do it well.”

Redding said the grant recipients are confirmation of what they saw in the study. The state dairy study pointed to the benefits of adding processing capacity in Pennsylvania. And it saw cheese production, in particular, as an answer for Pennsylvania’s small farms’ success.

The second round of Dairy Investment Program grant funding, another $5 million, was part of the 2019 Pennsylvania Farm Bill, a package of bills that invested more than $23 million into Pennsylvania agriculture programs.

The Dairy Investment Program hasn’t been without its challenges. Rynn Caputo, a grant recipient, told the Senate Majority Policy Committee that being required to pay prevailing wage was a hindrance. Caputo heard of some recipients being unable to use their funds because of such issues.

But the interest for the program remains. Redding said they got more than 70 proposals for the next round of grants. The recipients will be announced in early 2020.

“You look at those projects, and the answer is found in those on-farm value-added projects,” he said, at the state Senate committee meeting. “I think that’s the answer … There’s a need for cheese, a desire for cheese.”

Warrnambool dairy farmer Bernie Free has emerged as the new UDV president, following a torrid year for the dairy body which has seen an exodus of members to join a breakaway representative body.

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