Profits Curdling At Some Dairies
STROUDSBURG, Pa. (AP) – The sour news about Pennsylvania’s dairy industry comes as no surprise.
“I don’t want to say that the sky is falling, but if the next few years are like the last few years, we’re going to be in bad shape,’’ said Steve Miller, who owns about 64 dairy cows in McMichaels.
The number of dairy farms in Pennsylvania decreased by 14 percent in the last three years, from 8,610 to 7,400, according to data released by the U.S. Department of Agriculture.
Last year was an especially devastating year for dairy farms across the country, but Pennsylvania fared slightly worse.
Lack of demand overseas, fewer Americans eating out at restaurants and an overabundance of production led to Pennsylvania’s dairy farmers making about 45 percent less profit last year, according to Mark O’Neill, a spokesman for the Pennsylvania Farm Bureau. The plummet in profits has led to many farmers dropping out of the milk game.
“It gets to the point where it’s not worth it for them to keep their dairy licenses,’’ said Steve Hughes, an agriculture expert affiliated with Penn State University.
Hughes said that those who gave up their dairy licenses – which means they can no longer sell the milk they get from their cows – didn’t necessarily give up farming, just one aspect of it.
Miller, who owns one of the three dairy farms left in Monroe County, said that he was able to survive the dismal three-year period because his finances were relatively solid and he didn’t have much debt.
Many dairy farming operations – especially smaller ones – borrowed too much when profits tanked. Their debt eventually put them under, experts say.
Unlike other types of farmers, who are able to stockpile crops with the hopes of getting a better deal for them at a later time, dairy farmers must move their product quickly before it goes bad. But if the market is saturated, buyers will offer really low prices because they know suppliers have no choice but to get the milk off their hands.
Over at the Bartholomews’ farm in Saylorsburg, Barbara Bartholomew said that she and her husband, Dale, were still “holding on’’ but that they had a difficult time over the last three years, especially in 2009.
“We had about half as much money coming in for our milk, but the price of feed, of fertilizer, of everything cows need, that didn’t go down,’’ Barbara Bartholomew said.
In addition, local dairy farmers say that business hadn’t been booming anyway because they’d been having a hard time competing with larger farms that are able to raise major capital. Such large farms usually fare better in volatile markets.
“When you start dealing with bigger farms, they’re businessmen first and foremost,’’ Hughes said. “These small operations, they operate small, they’re family driven, which is fine. But being small doesn’t necessarily help your bottom line.’’
Miller, whose grandparents started the 200-acre Miller farm 103 years ago, agreed.