Category Archives: Dairy farming

From the archives — the day of the auction

by Bethany M. Dunbar, June 11, 2010

New mown hay. Photo by Bethany M. Dunbar

In case anyone out there reading this is wondering why I write so much about agriculture and particularly dairy farming, I thought this article from the Chronicle archives might help explain my impulse.

I wrote this a short 19 years ago.  I am no longer married to Harvey Dunbar but still a part of his warm and wonderful extended family (or as one friend has called it, post-nuclear family).  The kids are all grown up and doing great things.  Time goes by.  Things change.

For 11 years I covered agriculture from inside of it.  I went to St. Louis to cover the farmer congress arranged by Willie Nelson back in the 1980s and met garlic farmers from far-flung states and all kinds of other farmers.  We had some basic things in common.  We had more in common than not in common.

For a year or two after our auction I did not do a very good job covering dairy farming or agriculture.  I guess I had to give myself a break.  I went to meetings still and wrote articles, but, well, it wasn’t the same.

In recent times I’ve had more enthusiasm for this beat as I see the organic movement growing and providing farmers more immediate control of their price and market, and energy farming options growing including methane digesters.  Consumers are becoming so much more aware of what they are eating and where it came from.  They want local food, healthy food.  This movement is exciting and promising for Vermont farmers, consumers, and everyone who likes to drive by a beautiful hay field.

Things are still wicked tough for the dairy farmers, especially farmers who ship to the conventional market, who have no control over the price they are paid.  That price is controlled by an antiquated federal system that must be changed.

We only have about 1,000 dairy farms left in Vermont and many more will go out of business this year.

I continue to write these stories in hopes that people will better understand these struggles and support the farmers both politically and economically as consumers.

Here’s the story I wrote on the day of our farm auction.

The day of the auction

by Bethany M. Dunbar, the Chronicle, May 8, 1991

I don’t remember the first glass of milk from our own cows that I drank, but I’m sure I’ll remember the last.

Jersey milk is extra rich in butterfat and protein.  Raw Jersey milk takes some getting used to at first — it’s almost as thick, creamy and rich as a milkshake, only not sweet.  But once you develop a taste, the store-bought stuff is a little like eating canned tuna fish when you’re used to lobster.

The last glass was on the day of our auction, last Monday.

• • •

April 29.  I didn’t sleep much last night, but apparently enough to dream.  I dreamed that along with the cows, my five-year-old son’s cross-stitch sewing kit that his grandmother gave him was up on the block.

I know why I had this dream.  It’s because Tristan considers a couple of these cows his, and he doesn’t think we should be selling something that belongs to him.  He’s right, so I have a hard time explaining to him why we are doing this.

Tristan is not here today.  It was his own decision not to be.  I’m sure he was right about this, too.  Tristan’s first sentence was, “Help Daddy milk cows.”

It’s easier for two-year-old Katie Ann.  She doesn’t really know what’s going on, and she’ll get to see more of her father now, after all.

My last glass of milk is as the sale begins.  I have to get away for a minute, it’s too emotional.  I go to the house and have a glass of milk.

In a minute I head back to the barn.  My husband Harvey is nervous.  He’s sitting on the side of the bank surrounded by friends — Bryan, Lowell, Ben, others.  Some of them may buy something, others are here just to see how he’s doing, and how the auction goes.  They are sitting on the bank watching while across the road, the auction starts with the machinery.

That stuff goes quick.  Generally, machinery isn’t bringing much these days with the price of milk as low as it is.  There are so many farm auctions, people can pick up equipment anywhere.  It’s definitely a buyer’s market.

Ours goes okay though.  Harvey seems to be relaxing.  Now for the cows.  This is the hard part to watch.  He goes in the barn, where he won’t have to watch it happen head-on.  He milks each cow as she comes in from being sold.  He had to wait until 10 p.m. to milk last night in order to have them full of milk for the sale.  They look better that way.

He stayed up almost all night, anyway, drinking coffee and sitting in the barn with his cows.  He had hired a man, Tim, to help us over the last week, and the two of them took shifts in the barn, keeping the cows clean.

Over the last few days, it’s been hard to tell whether our farm had the air of a wedding or a funeral.  The crew of Northeast Kingdom Sales came Saturday to set up the bright blue and white tent in case of rain.  As it turned out, it wasn’t needed and the sides are left off.  Anyway it certainly adds a festive air.

Under the tent is a plywood platform with a podium on it.  All this is at one end of our barn.  Sunday, the crew came with a pressurized spray cow-washing machine and hosed the girls off with Wisk detergent, one at a time.  They shivered in their tie-stalls, wondering what this was all about.  It’s not every day they get a bath and their tails combed.

It was only two weeks ago that Harvey made his final decision.  This came after months of wrangling and rassling with various options.  Expanding the herd size, then when that didn’t work making it smaller.  Nothing worked.  Our cost of production is still higher than what we make.

We figured over the summer we would lose about $2,000 a month.  I know this sounds like a lot, but others are losing more.  At the meetings, the unending meetings, farmers consistently say they are losing $3,000 to $8,000 a month.

These meetings, ostensibly to meet with politicians or advocates or other people who promise they have the power to do something, wind up being helpful in the way of support groups like Alcoholics Anonymous.  People stand up and tell about their situation, and a murmur of sympathy runs through the crowd.  We all feel better afterwards, knowing we’re not alone.  Farmers Anonymous, these should be called.

A few of the lucky ones are breaking even right now and will hang on.  I say lucky, but it’s not luck.  It’s men and women who are in their sixties or seventies and have farmed since they were old enough to carry a milk pail and have finally paid off their debt.  If you have no debt, you might be able to make it at the current price of milk.  But so few have no debt.

Others will hang on because they simply have no other choice.  The whole economy is bad, there are no jobs.  The price of milk has to go up again sometime, right?  They will try to weather this.

Some have no choice because they’ve already sold their development rights, so they have no chance to get money out of the farm.  Others can find nobody to buy the farm in the flat economy.

What will happen is the economy will pick up in southern New England long before here, so those people will have money to snatch up bargain properties in northern Vermont.  Ten-acre lots, their dream come true.  Vermont’s nightmare.  Vermont will start looking more and more like suburban Massachusetts.

Meanwhile, the farmers try to hang on.

The people to whom they owe money understand.  We had a call not long ago from one guy who breeds cows.  If we could send $44, we would be caught up to within 150 days, he said, sounding apologetic for even asking.  I said I would ask Harvey, I thought we could come up with the money.

But when the milk check comes, you have to pay the electricity or they’ll shut that off.  You have to pay certain bills, or other services will get shut off.  The nice guys are the ones you don’t pay, because they’re the ones that don’t take you to court.   Then you feel like shit when you walk into their stores to charge something else, or when you run into them in town.

Harvey and I and our two children have an option.  We will move in with his parents, become an example of how the extended family is coming back into fashion by sheer economic necessity.  He will work for our present landlords putting up feed, and in the winter make some income boarding heifers in our heifer barn.  We’ll also continue raising sheep on the side, and I have my job at the newspaper.

With that heifer barn, one day, if the price ever got better he could build on to it a little, raise some heifers and get back into dairy farming.

At the auction, Jeff, another farmer, tells me Harvey will be farming again in a month.  He means Harvey has farming in his blood.

That’s the trouble, farming does get in your blood and then what can you do?  The reason farmers don’t get any money is that they’re willing to work 18 hours a day, seven days a week with very rare vacations or even an entire day off, if only they can break even.

It’s like an addiction, and that’s why we need Farmers Anonymous.

Of course the milk dealers take advantage of us in this situation.  And you don’t see the price of milk for consumers dropping in the stores.  The middle-men, Kraft cheese and everybody else, are making out like bandits.  Long live Corporate America.

By the time I’m talking to Jeff about how long Harvey’s likely to stay out of farming, I’m a little more relaxed, too.  The third or fourth cow that sold brought $2,600, which is much more than we expected.

I start looking around at the crowd and find people looking at me with a certain expression.  How is she handling this, they wonder.  I alternate between relief that it’s going well and sadness at not wanting to see this part of our lives over.

I’m holding up pretty well until I start talking to Liz, Jeff’s wife, in the milkhouse.  Jeff wouldn’t even be able to go to his own auction, she says.  Things shouldn’t be like this.  I start to cry, and then she quickly changes the subject to a funny sign on the wall so I can think about something else.

It works, and I go to look for Harvey to see how he’s doing.  Farming is his dream more than mine, and I expected him to be heartsick today.  But he’s mainly relieved and gratified that it’s going so well.  A lot of important people in the Jersey breed in the state, and even some from New Hampshire and New York, are here today.

He’s pleased to see that 11 years of work, breeding our cows to the best bulls, raising the best heifer calves, has paid off.  Despite the low milk price, the price of cattle is still good.  One couple from Burke who bought 17 of our cows is just going into farming.  I hope they have good luck.

Our landlords, Al and Joan, bought a few.  So those will stay here, including some of Tristan’s pets.

As the auction rolls along, I am starting to get excited.  I see the subtle battles fought with slight tips of the head as auctioneer Reg Lussier rattles on about this or that cow.

The sad part comes at the tail end of the sale when our older cows go for $700 or so.  Eve is like one of the family.  She was named Eve because she was the first calf we had born to one of our own cows, 11 years ago.  She was the beginning of our beautiful herd.

Over the years, she gave us almost all heifer calves, and that cow family is one of our best.   She is a lovely cow, mostly black and dark brown with a funny white marking on her flank.  Her face is so wise.  I’ll miss her.

At about 3 in the afternoon, it’s all over.  We have done well.  The cows brought a lot of money.  It will all go to our main creditor — the check is even made out to them — but that will get us caught up to a reasonable level on that debt.

Harvey has saved out his round baling equipment, and that will be his way of making some income this summer.

By the end of the summer we should have the leftover day-to-day bills paid off.   We should be able to go into the stores in town without getting that sinking feeling.

The auction started at 11.  So much riding on so few hours.  But it went okay, and we’ll sleep better tonight.

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A convenient tsunami of milk

Sun hits a farm field in Glover. Photo by Bethany M. Dunbar

 

A federal dairy lawsuit is filed; perhaps a tsunami of justice will ensue

by Bethany M. Dunbar, November 20, 2009

When I started looking at the complaint in the federal lawsuit recently filed against dairy processors, a couple of names popped out at me.

Alice Allen of Wells River is one of the plaintiffs.  As part of the Vermont-New Hampshire Milk Marketing Study Group, she has hosted meetings about agriculture policy in the Wells River area for years.  One of these was in 2006.  An assistant professor from Iowa came to talk about the local food group he had started out there 13 years before — to try to link farmers and consumers.

He had done economic studies that showed that farmers in his county produced $1.08-billion worth of food, while consumers in the same county bought $400-million worth of food, mostly shipped in from somewhere else.  He decided to have a goal of capturing 10 percent of that for local farmers.

A full story about that meeting is posted on the Chronicle’s web site. I came away from that meeting excited about the ideas he had to link farmers and consumers.

The more the food is handled, processed, and shipped around, the more energy is wasted and the more money goes to middlemen instead of producers who could strengthen our rural economies if they could make ends meet.

Local food is not only likely to be healthier for people to eat — it’s healthier for the economy and the planet.

The other name that I noticed in the dairy lawsuit was Gary Hanman of Dairy Farmers of America (DFA).  This giant dairy processor is named as one of the defendants in the lawsuit, which claims that milk handlers have been colluding to keep the price low for farmers in order to keep more income for themselves.

I remembered hearing Gary Hanman speak at a meeting of the St. Albans Cooperative Creamery and looked that story up.

Coincidentally, that was also in 2006.  At that meeting Mr. Hanman talked about a “tsunami” of surplus milk.  Turns out it was a rather convenient tsunami for some of the processors.  In fact DFA might have even helped create the tsunami.  According to a report I read recently, DFA might have even helped create the tsunami by importing great quantities of dairy products.

What’s wrong with this picture?  Nothing if you are the CEO of a giant mega processor that is getting away with paying dairy farmers much less than the cost of making milk, while consumers are paying just as much as they ever did in the supermarkets.

To read the full story of that St. Albans meeting, check on the Chronicle’s web site.

Posted below is the story I wrote about the federal lawsuit.  It’s likely to be a long time before this one is resolved.  I will try to keep you posted.

Happy Thanksgiving everyone.  I hope your tables are well laden with wonderful local foods.

Class action suit filed against dairy processors

by Bethany M. Dunbar, the Chronicle, October 21, 2009

BURLINGTON — A class action lawsuit has been filed in U.S. District Court against Dairy Farmers of America (DFA), Dairy Marketing Services (DMS), Dean Foods, and H.P. Hood for keeping farmers’ milk prices low.

Alice and Laurance Allen of Wells River and Garret and Ralph Sitts of Franklin, New York, have filed the complaint on behalf of roughly 9,000 dairy farmers in 11 states in the northeastern United States.

A similar suit was filed about a year ago in the southeastern United States, according to Benjamin Brown of Cohen, Milstein, Sellers and Toll, a Washington, D.C., law firm that is handling the case.  Andrew Manitsky of Gravel and Shea in Burlington is listed as a co-counsel along with another attorney from the Washington firm.

The lawsuit claims that the defendants worked together to buy up dairy processing plants and force small cooperatives and independent farmers to deal with them, so they could control the raw milk market and therefore the price of milk paid to farmers.

Similar allegations have been discussed in the U.S. Senate Judiciary Committee recently.  The U.S. Justice Department is considering some of the same questions about the dairy industry and a hearing was held on this subject in St. Albans recently.

Testimony at this hearing was that dairy farmers are getting milk checks that do not cover the cost of production, and many are going out of business.  Meanwhile the CFO of Dean Foods made over $116-million in five years.

Alice and Laurance Allen operate Al-lens Farm, which was a member of Booth Brothers until 2006 and a member of the National Farmers Organization from 2006 until today.  The Allens milk about 30 cows.  The Allens and some other farmers in their area, on both sides of the Connecticut River, have hosted discussion meetings on wind energy for farms, local foods, and other related subjects.

The class action would include anyone who made and sold milk for drinking through DMS from October 9, 2005, to this month.

“Dairy cooperatives are associations of dairy farmers who agree to collectively market their Grade A milk.  Dairy cooperatives are supposed to be owned, operated, and controlled by their member farmers,” says the complaint.  It says that farmers not only didn’t control DFA, but meetings and deals were secret.

“DFA’s management does not disclose the details of its financial transactions to its members, thereby avoiding oversight and accountability.  Because DFA is not a publicly traded corporation or a union, it is not legally required to publicly disclose such information.”

The complaint says that in 1996 Carole Knight was elected to the regional board of DFA’s predecessor, Mid-American Dairymen.  She began asking questions about what deductions from her milk check were being used for.  Management had her ejected from the board.

“She subsequently filed suit and won a $450,000 verdict and attorney’s fees,” the complaint notes.

Dairy cooperatives allow farmers to work together to get a better price through a federal law called the Capper-Volstead Act.

“The Capper-Volstead Act grants dairy cooperatives antitrust immunity with respect to price-fixing agreements with other dairy cooperatives ‘provided, however, that such associations are operated for the mutual benefit of the members thereof,’” says the complaint.

The 67-page document offers an explanation of the federal milk price system and a background of mergers and sales that, the plaintiffs argue, forced most farmers to deal with DFA and DMS or lose their market for milk completely.

The complaint says DFA was created in 1998 by merging four cooperatives, and it currently has about 1,900 members in the Northeast.

In 1998 DFA began investing “significant amounts of its producers members’ monies and equity and incurred significant amounts of debt to acquire stakes in many fluid Grade A milk processing plants.”

Robert Wellington, senior vice-president at Agri-Mark, testified before the Senate Judiciary Committee that “DFA simply used its economic muscle to buy up market outlets for milk even though it does not have the local milk supply to service that milk,” according to the complaint.

“DFA greatly strengthened its position in the Northeast in 1999 by forming DMS, a marketing agency, with Dairylea Cooperative,” the complaint says.

It says that DMS hauls table milk to the processors for its members.  “DMS determines how much its member farmers and member cooperatives receive for the fluid Grade A milk,” the complaint says.  It says DMS sells about 16 billion pounds of milk produced by 9,000 farmers in the Northeast.

DFA owns 50 percent of DMS and controls DMS’ operations, the lawsuit says.

The milk industry needs balancing plants to take milk at times when supply of fluid milk exceeds demand.  There are seven balancing plants in the Northeast, the complaint says, and five are owned and controlled by DMS cooperatives.

In July 1997 Suiza entered the New England market when it bought Garelick Farms, and in July 1998 Suiza bought West Lynn Creamery in Massachusetts.  Suiza then bought Cumberland Farms and two others.  By 2000, Suiza controlled 70 percent of the fluid milk processing in New England, the complaint says.

Suiza had entered an agreement with DFA, then it closed several of the plants.  In 2001, Suiza and Dean Foods merged.

“Dean, Suiza, and DFA agreed that Dean would buy out DFA’s 33.8 percent stake in Suiza for $166-million.”

Dean and Suiza were ordered to divest 11 plants, the complaint says, but the plants were sold to a third party “owned and controlled by another member of the conspiracy,” National Dairy Holdings, created by DFA and two former Dean executives.

“Upon information and belief, DFA and its subsidiaries provided more than $400-million in financing to NDH.”

After Suiza and Stop and Shop in Readville, Massachusetts, merged, the St. Albans Cooperative Creamery was forced to join DMS in order to maintain its market for fluid milk.

In February 2003, St. Albans issued a statement saying it had reached a marketing agreement with DFA.

“This is not a merger of these two organizations.  This is an annual marketing and membership agreement,” says the statement.  Later, St. Albans joined DFA and over-order premiums paid to farmers decreased significantly, according to the complaint.

In November 2002 Hood and NDH tried to merge.  Objections were raised by state attorneys general, and the merger was restructured to a stock exchange.  NDH sold all its Northeast fluid bottling plants to Hood.  DFA became 50 percent owner of NDH and 15 percent owner of Hood.

Agri-Mark is the only cooperative that supplies fluid Grade A milk to Hood that is not a member of DFA or DMS, the complaint notes.

It says independent farmers have been forced to join DFA or DMS in order get a market for their milk, and the complaint says Dean’s CFO has bragged that low milk prices for farmers have created “the perfect sunny day” for the $12-billion corporation.

No hearing date has been set yet.

E-mails to the defendants yielded only one immediate answer.  A statement from DFA denies that the cooperative has hurt farmers by its actions.

“We are continuously looking for additional ways to increase dairy farmer pay price and net returns, not suppress them, and have been successful in doing so,” says the statement issued by Monica Massey, vice president of communications for DFA.

Keep Local Farms

Diane Bothfeld

Diane Bothfeld is the new Vermont Deputy Secretary of Agriculture. Photo courtesy of Kelly Loftus

by Bethany M. Dunbar,  October 30, 2009

Congratulations to Diane Bothfeld who was just named Deputy Secretary of Agriculture for Vermont.

Ms. Bothfeld is an enthusiastic and capable advocate for dairy farmers and agriculture in general.  Before she worked for the state as dairy policy administrator she worked at St. Albans Cooperative Creamery.  I remember seeing her at annual meetings back in those days.

Diane Bothfeld grew up on a farm in Cabot, right in the heart of dairy country, got a bachelor’s and master’s in science at the University of Vermont and has been involved with the Campaign to End Childhood Hunger and the Northeast Organic Farming Association.

Most recently, Ms. Bothfeld has been working on fair trade for Vermont dairy farmers — a concept that is most commonly reserved for dealing with third-world countries but is strangely applicable in the United States in this case.

The concept is simple — a brand and logo “Keep Local Farms” shows consumers that some of the money that they are spending is going directly to farmers.  People who care about farmers even more, and want to take further direct action, have an opportunity to donate to the fund through the Keep Local Farms web site.  The money will be distributed to farmers twice a year.  The web site also has lots of great facts and statistics about dairy farming.

Speaking with a local farmer recently, he said he likes the idea but said really consumers should not have to donate to anything.  The price paid in the stores is enough — it’s just that too much of it goes to the middlemen.

Posted below is my story about the Keep Local Farms program, plus an editorial I did recently.

There is a lot going on right now including a federal lawsuit against some of the middlemen.  I will post a story on that soon.

Lately I’ve been thinking about one of those annual meetings of the St. Albans Co-op I covered when Gary Hanman of Dairy Farmers of America (DFA) came to Vermont.  One of these days I’m going to dig that story out and post it.  His comments back then might be kind of interesting to read now that he has been named in the lawsuit against DFA and others.  The suit claims the processors have been manipulating the milk price to keep the price low for farmers.

I am covering the suit for the Chronicle and New England Country Folks magazine, so please be sure to read those too.

I’m finding that this blog is getting a lot of readers who are interested in the dairy crisis story.  I intend to make it a regular subject.  We have to keep these farms going in any way we can.

My very first blog got a great response from Gloria Bruce of Northeast Kingdom Travel and Tourism Association who recommended following up with a story about agri-tourism, which is in the works.  Thanks, Gloria, for the ideas and information!  Her organization will host a meeting on this important subject in Newport on November 18.

Thanks for your comments and e-mails.  Please keep them coming!

Keep Local Farms

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This is the logo for the Keep Local Farms program.

by Bethany M. Dunbar, the Chronicle, September 16, 2009

A program called Keep Local Farms — launched Monday— is already raising cash for dairy farmers.

An enthusiastic Diane Bothfeld said Tuesday she hopes Keep Local Farms will raise $1.8-million for direct payments to farmers within the first six months.  If so, that would mean $1,000 for each farm in New England.

“I’m sounding real confident,” she said after explaining how the program will work.

The concept is to apply the formula of fair trade, and establish a mechanism to send some extra funds directly from consumers to farmers.

It’s a concept Ms. Bothfeld and others at the Vermont Agency of Agriculture have been working on for years.  She and others have done research about how much consumers would be prepared to help, if they knew the farmers were actually getting the money.

Funds will come into the program three ways.  People can donate directly through the Keep Local Farms web site (KeepLocalFarms.org).  Consumers can support businesses that advertise they are part of the program.  Businesses and institutions that post a sign with the Keep Local Farms logo will be paying extra for milk, at a level to be negotiated, and all of that extra money will go directly into a fund for farmers.

The first example is going to be the University of Vermont, which will be on board in October.  Each pint of milk that a student at UVM buys will cost an extra 10 cents, and that money will go into the fund.

“We’re working with hospitals too,” she said.  “You don’t get to take a piece out of it.  The whole amount has to be passed through.”

The third way for money to come into the fund is by co-branding with processors.  For example, an agreement might be reached with Booth Brothers to put 30 to 60 cents a gallon extra into the fund.  Then the company would be allowed to put the Keep Local Farms logo on its bottles of milk.  Potentially, the brand could be applied to cheese and other dairy products as well.

Ms. Bothfeld said research of consumers in New England has shown that people would pay 30 to 60 cents more per gallon if they knew the money was going directly to farmers.  She said they started the research in 2007 and went back to check if it was still accurate during the current economic downturn, and it still is.

One of the areas researched was the definition of local.  Researchers found that Vermonters consider Vermont local, while people in Boston feel Vermont and New Hampshire are local.

“We’re all in this together,” said Ms. Bothfeld.

Part of the reason for Ms. Bothfeld’s enthusiasm on Tuesday was the fact that the program was just launched Monday, and the next morning the organizers checked the web site and found they had donations of $600 already — in one day.

Farmers can join individually, or dairy cooperatives can join in bulk.  Cooperatives that have already joined include Agri-Mark, St. Albans Cooperative Creamery, Dairy Farmers of America and Dairylea.

The board that will take funds in and distribute them is the New England Family Dairy Farm Cooperative.  It was formed in 2005 and is run by a 12-member board of directors — farmers from each of the New England states.  Currently, 1,000 of New England’s 1,800 dairy farms belong to the cooperative.  The rest are being recruited, according to a fact sheet distributed at the Keep Local Farms press conference.

Payments to farmers will be made twice a year, once at spring planting time and once at fall harvest.  Information on the total dollars distributed and the average amount returned per dairy farmer will be posted on the Keep Local Farms web site.

The fact sheet says that New England has lost over 100 dairy farms in the last two years, and thousands were lost before that.

“With the current price downturn, we are in a crisis situation where we may lose the ability to maintain a viable dairy industry in New England.”

The fact sheet notes that farmers are currently receiving about 97 cents per gallon of milk, although the cost to produce a gallon is about $1.80.

According to information posted on the web site, in 2006, milk prices reached a 25-year record low of $1.14.  In February of 2009 the price dropped even further, down to about $1.

“Since the 1950s, the dairy farmers’ share of the retail/consumer dollar has declined from about 50 percent to about 30 percent today.  Of the milk you purchase at the supermarket, only about 30 percent of the price gets back to farmers,” says the site, which also has short profiles of a handful of member dairy farmers, some lovely photographs, charts, facts, and pages for frequently asked questions that have not yet been asked.

Consumers are urged to join at a level they can afford.  Joining comes along with a bumper sticker, T-shirt or insulated grocery bag depending on the level of support.

Editorial, the Chronicle, September 22, 2009

Here are some interesting numbers coming out of a hearing on dairy prices in St. Albans Saturday:

Dean Foods made first-quarter profits of $76.2-million, and its chief executive officer has personally made $116.38-million over a five-year period.

Dean Foods is the conglomerate that controls 70 percent of the milk sold in New England.

Meanwhile, dairy farmers are losing money at a rapid clip.  One typical farmer testified that he is losing $4,500 a month.

Bob Wellington of Agri-Mark testified that every cow on a pasture in Vermont generates economic activity of more than $13,000.

An agricultural economist from the University of Vermont testified that if the current dairy crisis continues, 150 dairy farms might go out of business in the coming year.  (There are only about 1,100 left)

There is so much wrong with this picture that it’s hard to know even where to start.  Vermont needs to keep those cows, and we need to keep those farmers — as many as we can.

If Vermont farmers could even reliably and consistently make 50 percent of what milk is sold for in the stores, many — if not most of them — could stay afloat.  But the farm price for milk is closer to 30 percent of the retail price, thanks to an antiquated federal system that allows Dean Foods to monopolize the market.

The hearing mentioned above was the Senate Judiciary Committee.  U.S. Senators Patrick Leahy brought the hearing to St. Albans.  U.S. Senator Bernie Sanders hopes to continue a probe of Dean Foods that was dropped in 2006 because, he says, it was unpopular with the Bush administration.

A full investigation could go a long ways to bring out the truth of where the money is going in the dairy industry and why.

If we are in some semblance of a free market, then competition needs to be able to function.

If not, let’s have a supply management system like the one proposed by Dairy Farmers Working Together.

This business of being stuck in the middle is just not working for farmers, milk consumers, tractor salesmen, grain dealers, nor for the Vermont tourism economy that needs those open fields to prosper.

It really doesn’t seem to be working for anyone but the CEO of Dean Foods.

We should note that we (the Chronicle) did not attend the hearing in St. Albans.  But we were able to watch videos of the hearing and get these statistics from a new Vermont web site called vtdigger.org.  The brand new nonprofit news site is edited by Anne Galloway of East Hardwick, an accomplished journalist and an old friend.  It’s worth a look. — B.M.D.

Dairy Crisis

Vermont feature September 4, 2009

by Bethany M. Dunbar

Hi there. You are looking at Vermont Feature, a brand new blog designed to cast a bit of extra attention on a news story each Friday. I’m starting with dairy farming because it’s near and dear to my heart. It is a life I lived for 11 years, and my two grown children were born on a farm. We had beautiful Jersey cows. The life was difficult but rewarding in so many ways. I have no regrets.

Posted below are two recent dairy stories. The first is the Borland auction, which got media attention from all over the place, and a longer piece I did in July, a more general story about the dairy crisis.

The dairy crisis is not new. Farmers have struggled with cycles of low milk prices for decades, and it’s not for lack of support from the Vermont public and consumers. The problems with the federal pricing system are severe and deep-seated, and it will be no easy task to solve them. But we have some incredible advocates who are doing what they can for the farmers — including our congressional delegation.

A recent survey by the Council on the Future of Vermont showed that 98 percent of Vermonters value the working landscape and its heritage, which was the highest-rated statement in a poll.

My intention here is to get some feedback about issues like this. I’d love to get comments from people about that statement. What is the most important part of the working landscape and its heritage to keep? The farmers? The work that they do? The farm economy? The cows? The milk? The scenery? The memories?

How do we do it?

Thanks for reading this. Please comment at the bottom or send me an e-mail directly at bethany@bartonchronicle.com. If you are not already on the Chronicle’s web site, you will find more background articles there: http://www.bartonchronicle.com. Please also support the actual newspapers: especially the Chronicle and New England Country Folks!

Thanks,

Bethany M. Dunbar

co-editor, the Chronicle

Borland dairy auction draws buyers from all over

August 12, 2009

A Holstein looks out at the crowd during the auction.

A Holstein looks out at the crowd during the auction.

by Bethany M. Dunbar

GLOVER, Vt. — By the end of a long day Wednesday, August 5, Ken and Carol Borland were relieved and tired.

The auction of their dairy cows and equipment was done.

“At our ages you can’t keep going in debt waiting for things to get better,” said Carol Borland. She said she knows that her husband told a newspaper reporter that there are probably 1,100 dairy farmers in Vermont who would trade places with him that day.

That would be all of them.

These days dairy farmers are getting about 95 cents to $1 for each gallon of milk they produce, which is about 50 cents less than the average cost of producing that milk. It is about the same as the price they received 30 years ago. Meanwhile the cost of fuel and grain and other supplies are drastically higher.

U.S. Senator Bernie Sanders and others are putting forth a number of proposals to provide emergency funds to keep farmers going, and to work on a more long-range solution to the constant roller-coaster ride of farm milk prices.

The senator said in a press release that the Senate approved an amendment on August 4 that would increase federal price supports by about 13 cents a gallon.

The senator is also calling for an investigation of price fixing by Dean Foods, a company that controls 70 percent of the milk sold in New England and 40 percent nationally, according to Senator Sanders.

“The drop in prices paid to farmers has not coincided with a drop in prices for consumers. While New England dairy farmers receive just $1 per gallon of milk, Americans are paying on average $3.01 per gallon at their local store.” says a press release.

One program to help farmers who want to get out of dairying is a buyout, established by dairy cooperatives.

Ken Borland decided against going into that program, which would have meant that all his cattle would have to be slaughtered for beef. The herd of Holsteins was built up over several generations. Genetics was part of the draw for dairy farmers from New York, Maine, Rhode Island, and Pennsylvania, who were interested in buying them to milk them.

“Ken’s one of the most respected individuals in the country,” said Burton Hinton of Westmore. “I know what I’m getting.”

He added, “It’s tough buying them from a Yankee fan though.”

Cows in the Borland herd with top breeding are producing over 100 pounds of milk each day, the auctioneers noted. These cows were drawing bids of $2,000.

The Borlands are selling their maple sugar bush to Mark and Hope Colburn and their family.

“It’s interesting that what for us is a second income is what sold the farm,” said Carol Borland. They will keep some of the land on which to build a new house. They will move the 1898 sugarhouse. Ken Borland plans to continue doing some sugaring.

Dairy crisis called worst in 30 years

July 15, 2009

Tule Fogg and Mark Dunbar at their dairy farm.

Tule Fogg and Mark Dunbar at their dairy farm.

by Bethany M. Dunbar

EAST CRAFTSBURY — Mark Dunbar is philosophical.

He says if it comes right down to it, his priority will be saving the farm before he saves the cows. This farm has seen seven generations of his family working the land. He doesn’t want to be the guy who loses it all.

Mr. Dunbar and his wife, Tule Fogg, are hoping they can hang on and continue dairying, but with the milk price received by farmers at around $11 for a hundred pounds (about 95 cents a gallon) he’s not sure how long he can stick with it.

The average cost of making milk in Vermont is about $19 for a hundredweight, or $1.63 a gallon, according to the Vermont Agency of Agriculture.

Mr. Dunbar and Ms. Fogg are one of 1,046 dairy farms left in Vermont. No doubt most — if not all — are going through some soul-searching to figure out how to keep farming or how to stop. Meanwhile advocates and officials are struggling to come up with programs to help keep as many as possible in business.

For farmers who have lost their ability to remain philosophical, a suicide prevention hotline has been established.

“The National Suicide Prevention Hotline is available to help,” says a newsletter from the United States Department of Agriculture. “If you know a farmer or a rancher who is under stress and is reluctant to ask for help, or if you just need to talk to someone call 1-800-273 TALK (8255). Your call will be routed to the crisis center nearest you, where trained staffers are available 24/7. This nationwide service is free and confidential. Help is just a phone call away.”

“The Vermont dairy industry is going to change dramatically,” said Rick LeVitre of the University of Vermont Extension system, who has worked in Extension for 29 years — most of that time with dairy farmers. Mr. LeVitre runs the Farm Viability Enhancement Program, which is currently working with about 50 farms. He said when the current crisis has past there will be large farms (over 500 cows) that can last through the price fluctuations. There will be small farms that find a niche market, a value-added product or specialty. The ones in the middle are facing the biggest squeeze. These will have the hardest time to survive, he predicted.

Even organic farmers are struggling as the market for the more-expensive organic dairy products has dropped substantially.

•••

The Dunbars have done everything they can think of to bring down expenses and draw in a bit of extra income here and there to make ends meet. They have stopped doing monthly veterinary health checks and quit getting their milk tested by the Dairy Herd Improvement Association. Both of these steps might hurt their dairy in the long run, but they have to cut these costs for now. They are thinking about using a bull instead of using artificial insemination services.

Mr. Dunbar teaches a basic tractor class, on the farm, to Sterling College students. Ms. Fogg teaches art and sells T-shirts. She rides the school bus to work to save on gasoline.

Mr. Dunbar said he’s considering working with someone to make a specialty cheese. He’s been selling cull dairy cows as beef. He is considering selling feed and lumber.

“We need to think way outside the box,” he said.

“People are helping each other a lot,” Mr. Dunbar added. He said former employees are coming around to help as volunteers, and his son John, who is 17, is working full-time (and then some) on the farm for no pay. His father, Wayne, is also helping out. They also got a student employee through a grant program.

Yankee Farm Credit and the vendors are doing what they can to help as well, Mr. Dunbar said. They are not hounding him if a payment is late.

“The IBA guy says we’re all in it together,” Mr. Dunbar said. IBA is a dairy supply company. “As long as I keep giving him a little money, he keeps me going.”

He added, “Some of it is self-preservation on their part.”

•••

An antiquated federal milk price system is blamed for the situation.

Vermont Agency of Agriculture Secretary Roger Allbee said the system is just not working any more. U.S. Agriculture Secretary Tom Vilsack visited Concord, New Hampshire, on July 6, and Mr. Allbee met with him. He reported that the Obama Administration is concerned and understanding.

A national surplus is currently driving the price down, Mr. Allbee said. Price fluctuations have been the norm for years but seem to get more extreme as time goes by. The price has been in the $11 or $12 per hundredweight range since February.

“It only takes 2 to 3 percent,” Mr. Allbee said, about the surplus. A year ago, China and India and other nations were buying 11 percent of the milk produced in the United States. Now they are not buying.

A program called Cooperatives Working Together (CWT) aims to reduce the surplus by taking dairy animals out of production. A CWT buyout this spring took 101,000 cows off farms, but Mr. Allbee said the national herd needed to be reduced by 300,000. The CWT buyouts are paid for by deductions from farm milk checks of 10 cents per hundred pounds. CWT is run by the cooperatives, not the government. Cattle bought out through the program are sold for beef.

He said that program could have a bigger impact if it was expanded.

Four farms in Vermont participated. One of them is already back in dairying.

Willy Ryan of Ryan Brothers Farm in Craftsbury said he put in a bid that he thought was high, but it was accepted. Bids are made per hundredweight. His was $6.65, which ended up being about $1,360 per cow or $1,000 net. They would have made more, but they are going back to milking before the year is over. In fact they only stopped for a day and a half.

That means Ryan Brothers Farm is paying a penalty of 10 percent.

“We’re back to milking nine cows,” Mr. Ryan said, and they will probably be shipping milk again fairly soon. The Ryan brothers have been able to buy animals for about $800 apiece.

“I’m buying back probably better cows,” Mr. Ryan added.

He said his brother felt badly about sending all his good dairy cows for beef, but it was a financial decision. They had to do it.

“Something’s wrong with the system when I have to kill my cows to survive,” he said.

“I’ve never seen anything like this in 33 years,” Mr. Ryan said about current economic conditions in dairying. “People that never owed any money to anyone owe money here, there, and everywhere.”

Mr. Ryan said if the price doesn’t get any better soon there will be a blood bath in two months. A lot of farmers are building up debt who never did before, he said.

“By September the grain companies are going to start shutting people off,” he said.

“It’s kind of a silent death,” he said. Some farmers have decided not to have an auction because the price of cattle, real estate, and farm equipment is so low that they might not come out even. Mr. Ryan went to one auction where the last eight or ten cows went for beef, even though they were nice dairy cows.

“They ran out of farmers to buy ‘em,” he said.

He added that the disaster might be an opportunity for someone who is just going into farming.

“You make your money when you buy, not when you sell.”

Yvon Lanoue is a farm management consultant who works for Mr. LeVitre on the Farm Viability Enhancement Program. He said farmers who are interested fill out a one-page application. Farmers accepted will get help writing a comprehensive business plan, setting priorities and exploring possible new business directions.

“It can help them survive,” Mr. Lanoue said.

Mr. LeVitre said some of the farmers are working on transitions, getting information about Chapter 12 bankruptcy, and some are just trying to figure out how to stay in business for two or three years.

He agreed with Mr. Ryan’s assessment, which Mr. Dunbar did too, that a lot of farmers are not selling out right now because of the general economy and lack of alternative jobs.

Some people are looking into making ice cream, bottling milk, or making cheese, but Mr. LeVitre noted that it takes an infusion of capital to do that.

“How much debt can one continue to assume?”

These are the day-to-day questions that the program tries to help farmers assess.

“It’s a world problem. It’s not just here,” Mr. LeVitre added.

Mr. Dunbar said the program was helpful for him — not that it provided any financial aid — but it was a fresh look at a situation from outside that was valuable.

•••••

The Vermont Agency of Agriculture and Vermont’s congressional delegation are struggling to find short-term aid and long-term solutions to the dairy crisis.

A press release this week from Congressman Peter Welch says he has introduced a bill to adjust the Milk Income Loss Contract (MILC) program for inflation. The MILC program helps fill the gap between the farm price and the cost of production. MILC payments cover 45 percent of the difference between the farm price and a “target price” of $17 a hundred pounds — which is still $2 below what the Agency of Agriculture says is the average cost of production in Vermont.

“I recognize that the MILC program does not go far enough, even with possible increases, but it remains the fastest way to put money back in farmers’ pockets during this crisis. These bills are an effort to provide short-term assistance to farmers as we work together on a longer-term remedy to volatility in the milk market,” says the release from Congressman Welch.

Senator Bernie Sanders met recently with the head of the U.S. Justice Department antitrust division to talk about a formal investigation of the “concentration of ownership among processors and the lack of competition.”

The release says that Dean Foods processes about 70 percent of New England’s fluid milk.

Agriculture Secretary Roger Allbee said the dairy co-ops have no clout in the market any more.

The Vermont Milk Commission plans to meet in Montpelier next week and take public comment on the dairy crisis.

Secretary Allbee is working on another method to possibly help farmers by creating a new brand of Vermont fair trade milk, in hopes that consumers might support the farmers by buying that product. He said the state is working with a retailer in hopes of developing something.

On the subject of long-term solutions, supply management is often mentioned as a possible way to control the price fluctuations.

Mr. Allbee said CWT is a form of supply management, but the program did not go far enough.

He said supply management can range from a voluntary effort to a strict limit on how much milk each farmer is allowed to sell. Canada dairy farmers work under a quota system and have for decades.

The Holstein Association and a number of other farm advocacy organizations are supporting a supply management plan called the Dairy Price Stabilization Plan.

A group called Dairy Farmers Working Together describes the plan on its web site. It would establish base amounts for farmers in order to curb overproduction.

Under this plan, “allowable milk marketings” would be established based on past sales and a market forecast. Those who produce more than the allowed amount would be charged a “market access fee” of $2 or $3 per hundredweight.

The income from those fees would be redistributed to farmers who hold their production even.

Supply management plans have been debated on an off over the years. Independent Vermont dairy farmers have often balked at the notion that someone would tell them how much milk they could produce.

Asked his opinion on the concept, Mr. Ryan said it’s going to make it hard for anyone to start farming.

“I think when I was 35 I would have been against it, but I’m 65, so I’m for it.”

•••

Organic dairy farmers are already working within a supply management system of sorts, established by the companies that buy and sell organic milk.

Vermont has 197 certified organic dairy farms, according to Dave Rogers of the Northeast Organic Farming Organization (NOFA). There were 200, but one went out of business and two others lost their contracts.

Organic Valley is a cooperative. The board of directors decided that they would rather have all the farms cut production by 7 percent than cut some of the members off.

Horizon, the other major organic buyer, is not a cooperative. It has started with a voluntary production cut, but Mr. Rogers said it’s likely that’s a warning. Farmers will most likely need to comply or face mandatory cuts.

“All the organic buyers are trying to match up supply with demand,” he said.

He said there are farms still making money with the cut, but those who have debt related to the transition from conventional to organic dairying might be in trouble.

“As with the conventional side, people are hurting, their businesses are at risk,” he said.

For many years organic farmers enjoyed 20 percent increases in the market each year. But the troubled economy has forced consumers to choose less expensive options. Mr. Rogers said as the economy recovers, he expects the organic market to pick up again, but it’s anyone’s guess when that might happen.

“Nobody’s got a very good crystal ball,” he said.

Mr. Lanoue of the Farm Viability Enhancement Program provided some milk price predictions for the conventional milk side of things he had received from Agri-Mark. These show milk prices averaging $16.45 in 2010, about $3 more than the expected average for 2009 but still lower than the state’s estimated average cost of production.

•••

Agriculture Secretary Roger Allbee said he literally lies awake at night trying to think of what he can do to help the farmers.

“It’s the worst it’s been in over 30 years,” he said. He spoke with one farmer who said he is losing $500 a month per cow.

There are 1,046 dairy farms left in Vermont right now, he said. In January there were 1,078.

“Farmers are very resilient. They’re survivors,” he said.