Dropping Milk Prices Stress Farmers

Details: Created on Friday, 01 April 2016 15:50; Written by Dylan Robichaud

Northeast Kingdom - The declining milk prices continue to make Vermont dairy farmers nervous. Over the last two years milk prices have dropped from a near record high of $25 per every 100 gallons of milk produced, to just $15 for every 100 gallons.

“When we did our budgeting in January, we came up with a deficit budget of $200-thousand dollars,” says George Kempton, owner of Kempton Farms in Peacham.

There are several factors that determine the price of milk, most of which depends on the supply and demand of the world market. Worldwide, milk is being produced near an all-time high, and Kempton says these bigger industry farms are hurting the smaller family owned businesses that we have in Vermont.

“The bigger countries that export like Australia, and New Zealand has suppressed the price, and it won’t come back until people make less milk,” he said. “A lot of farms milk 3,000 or even 10,000 cows. And they can make the milk cheaper then we can, and they’re just waiting for us to go out of business.”

Not only are farmers making less on selling their milk, but it’s also costing more to make the product. “It was good when it only cost us $13 to make it, but now it’s costing us about $18 to make it,” Kempton said. “Labor cost more, fuel cost more, taxes cost more, it generally cost more to live.”

Don Langmaid, who milks 43 cows out of Arshla Dairy Farm in Danville, says it’s just a matter of time before more farms go out of business.

“People are just going out of business, last I heard there was around 850 dairy farms in the state, and I’d be very surprised if there’s 800. And if milk prices continue this way there’s going to be a lot less,” Langmaid said.

According to the Vermont Census of Agriculture, the number of dairy farms in Vermont has gone down 86% over the last half century, and the number of cows that get milked in Vermont has gone down by 42%

But luckily, Kempton can make up for the loss of revenue through his maple syrup business that he runs on the side of his dairy operation. “We’ve been cutting cost and trying to make a little extra syrup and we’ll borrow money,” he said

Langmaid says one big factor contributing to milk prices is that as little as a two percent surplus of milk in the country can make the pay price go down as much as 40%, but there are solutions to that problem.

“If we all (farmers) got together, and everyone dropped two to three percent, that would do it, but we don’t do it,” said Langmaid.

Aside from the loss in revenue, there was some good news for farmers this year, they say the mild winter helped them out. “Everything is easier when it’s warmer for me. Nothing freezes as hard, and everything starts easier,” Langmaid says.