Milk Matters

Story by Claire Morenon | Graph design by Mary Reilly | Photos by Dominic Perri

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One of the things that makes CISA’s “buy local” effort so successful in the Pioneer Valley is the relatively straightforward message. When you hear “Be a Local Hero, Buy Locally Grown,” it’s easy to understand how you can do that: Just swing by a farmers’ market or look for local labels at the grocery store.

But when it comes to dairy, things start to get complicated. The hardy few farms that have navigated the regulatory and financial challenges to processing milk on-farm represent just a sliver of the dairy industry in Massachusetts.

For a host of historical and practical reasons, most of the dairy farms in the state sell their milk wholesale. These dairy farms have an enormous impact on land preservation, the agricultural economy, and everything else that a healthy agricultural system means for our community.

The problem for dairy farms is in the pricing. The wholesale price for raw milk is set at the federal level using a deeply complex system, based on how demand for a range of dairy commodities interacts with international supply, and decided by bidding at the Chicago Mercantile Exchange and some federal price support programs. The price farmers receive for their milk is only tenuously connected to the price you pay for milk at the grocery store.

In recent years, wholesale prices for dairy have stagnated, creating a serious gap between the cost of milk production and the amount farmers are getting paid for their milk. CISA recently worked with Dan Lass of the UMass Department of Resource Economics on a study to determine the actual costs of production for dairy farms in the state of Massachusetts. We found that it cost farmers $2.43 to produce a gallon of milk, while the price paid to farmers was stalled at $1.71 per gallon.

So how do farmers do it?

The primary financial factors not shown in the graph are programs like the state’s Dairy Farmer Tax Credit Program and the federal Dairy Margin Protection Program, which are vital stopgaps, if not permanent solutions. Many dairy farmers run diversified businesses and have income streams from other agricultural products. Finally, there are individual financial factors that can make a huge difference to a farm’s viability, such as mortgage debt or a family member’s off-farm income and benefits. Dairy farms, like all agricultural businesses, are seasonal in nature. The costs of production and the wholesale price do vary throughout the year, and when support programs are factored in, the picture from month to month can shift significantly.

So what can conscientious consumers do about all this? Unfortunately, I don’t have a snappy recommendation. Wholesale dairy pricing does, even with its complicated mechanisms, reflect consumer demand, so we can all don our milk mustaches and drink more milk. Various advocacy efforts, from establishing “Right to Farm” communities to pushing for a more localized system of price supports, can help our dairy farms stay afloat.

We’ve already seen that dairy farms are an important part of our agricultural landscape. We have the expertise, land base, and infrastructure to produce, process, bottle, and sell milk regionally, and Massachusetts dairy farms are producing a significant percentage of the milk consumed in the state. The thought that this entire agricultural sector and tradition be abandoned and that dozens of farm businesses should embark on entirely new enterprises, because of a relatively recent shift in the industry’s financial picture, is short-sighted at best.

As dairy farmer Darryl Williams of Luther Belden Farm told me, “Up until people stop drinking milk, I think there’s a future for the dairy industry here. We are committed to making a wholesome, high-quality, healthy product, always.”

Claire Morenon is a program coordinator at CISA (Community Involved in Sustaining Agriculture). For more details on CISA’s work with dairy farms, visit buylocalfood.org.