Dairy: Family Farmers in Crisis

Since 1970, the number of American dairy farms has dropped by more than 90 percent, from 640,000 to under 60,000 today. In an industry dominated by corporate interests, family farms are constantly at risk of going under. In addition to an unfair and often volatile pricing system, recent drought conditions and rising feed costs have tightened the financial squeeze on dairy farmers, leaving the future of their farms uncertain. If we want fresh, healthy, local dairy products, we need our dairy farmers to stay in business.

A Sour Pricing System

The dramatic loss of family dairy farms is the result of an unfair pricing system, one that is heavily manipulated by major dairy corporations at the expense of farmers and eaters. Dairy farmers are often paid prices far below their cost of production—leaving them at a loss each time they sell their milk.

  • As of August 2013, dairy farmers receive just $1.66 for a gallon of skim milk that retails at $4.69.[1]
  • Between 1998 and 2007, dairy farmers saw their share of the retail milk price drop 25 percent, even while retail prices increased by 40 percent. While farmers were paid less and consumers paid more, corporate processors walked away with windfall profits. Milk prices have risen from their lowest point in 2009, but even with increased prices dairy farmers are still struggling to cover their production costs.

Roller Coaster Years Leave Farmers High and Dry

Recent years have exacerbated the dire situation for America’s dairy farms. In 2009, the milk market tanked, with prices plummeting and droves of family dairy farms closing their doors. While milk prices recovered somewhat in 2010 and 2011, it was not enough to recover the previous year’s losses. Prices dipped again in 2012 just as persistent drought—the worst seen in the U.S. since the 1950s—and skyrocketing feed costs plagued dairy farmers. In the worst months of 2012, dairy farmers were losing up to $8.65 per hundredweight of milk they produced[2], putting their farms in jeopardy and dramatically impacting rural economies.

  • With expenses high and drought still plaguing half of the contiguous United States, dairy farmers are still facing tight margins in 2013.
  • Consumers, meanwhile, are seeing retail milk prices increase slightly in the grocery aisle.

How does the dairy crisis affect rural America?

Dairy farmers are pillars of their communities and local economies. As dairy farmers are forced into bankruptcy, a ripple effect on farm service providers, input providers and local purchasers and processors further taxes the country’s already fragile economy. For eaters, the loss of local dairies limits access to fresh, local milk products and often means a permanent loss of precious farmland to development. With fewer family farmers, the fate of our dairy products is left in the hands of factory farms and giant milk processors who have repeatedly cut corners with additives and processes that compromise the health and safety of milk.[3]

What can be done?

Until our milk pricing system pays farmers’ a fair price above their cost of production, our dairy farmers remain at risk. Thus far in 2013, milk prices are hovering near $19.00 per hundredweight—sometimes enough to break even, but not nearly enough to recover losses from the last several years or maintain or invest in important infrastructure on the farm. The U.S. Secretary of Agriculture has the authority to adjust milk prices when economic conditions severely affect farmers’ financial viability. Many dairy farmers are calling for this today, requesting a hearing to finally and officially fix the milk pricing system.

What is Farm Aid doing to address the crisis?

Farm Aid has stood side-by-side with farmers and partner organizations to call attention to the dairy crisis, advocating for pricing reform and antitrust enforcement in the dairy industry. Farm Aid met with U.S. Secretary of Agriculture Tom Vilsack in 2009, delivering petitions signed by more than 13,000 farmers and eaters calling on the USDA to establish a fair floor price for milk. In 2010, when the USDA and Department of Justice launched a series of public workshops to examine antitrust conditions in agriculture, Farm Aid attended each one, including one specific to dairy, to be sure the voices of family farmers were heard loud and clear. In addition, Farm Aid has provided emergency funds to dairy farm families in crisis and supported dairy farmers organizing rallies nationwide and trips to the U.S. Capitol to highlight the impacts of losing our family dairy farms.

Read Corporate Concentration in Agriculture: Limiting Choice and Forcing Family Farmers Out of Business to learn more.

Sources

1. National Farmers Union (2013). The Farmer’s Share.

2. Kardashian, Kirk. October 5, 2012. "Global Warming, Dairy Farmers, and the Do-Nothing Congress." US News & World Report.

3. Food & Water Watch. Milk Protein Concentrates; International Business Times (2013). "Aspartame in Milk: Big Dairy Wants to Sneak in Sweeteners Without Labels."

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