Saturday, February 25, 2017

Low Milk Prices Subject of Lowville Meeting

From Empire Farm & Dairy magazine


LOWVILLE — Dairy farmers gave elected officials and their representatives an earful on how low milk prices are threatening their livelihoods at a session Jan. 13 at the Lowville fire hall.

“It’s all about the legacy,” Leyden farmer Carrie Higby told a crowd of more than 100 people, most of them farmers or involved in the agriculture industry, along with representatives from county, state and federal governments. “What legacy are we going to leave for the next generation?”

Robert Domagala said he has been farming his whole life, loves it and doesn’t even mind the early mornings and long hours.

“I’d just love to get paid for what I do,” he said.

“We lost our wages, but nobody else lost theirs,” local farmer Joseph Sullivan said. “Farming is not a business. Farming is a heritage.”

While raw milk prices to farmers have dropped, retail prices of milk and dairy products have not seen the same reduction, West Martinsburg dairy farmer Ernest Beyer said.

Other issues brought up included the inability to cover production costs, an apparent push for larger farms to the detriment of the smaller ones, a federal push for skim milk in schools and control of the market by large entities such as Dairy Farmers of America and Dairy Marketing Services.

Local veterinarian Dr. Peter Ostrum said he understands farmers’ frustrations but urged dairy farmers in the crowd to pick their battles, consider customer demand and the amount people will pay for organic products and adopt best-management practices.

“We have to adapt to a changing economic climate,” he said.

Several of the governmental panelists said they are well aware of the milk pricing situation, being farmers themselves.

“I know where every one of you are coming from, because I’m one of you,” county Legislature Chairman Michael Tabolt, R-Croghan, said.

Tabolt said he was fortunate enough to have a son who wanted to continue his family’s farming tradition but added that his son couldn’t attend the meeting because he recently went from two to three milkings per day in hopes of staying financially solvent. 

He admitted that increasing milk production is probably counterproductive, since a surplus is partly causing the low raw milk prices.

“But it’s one of the last ideas we came up with to make it,” said Tabolt, one of six county legislators at the meeting.

Elected officials and their representatives encouraged farmers to band together to come up with constructive ways to help the situation.

“As a group, we can get things done,” said David Fisher, president of the New York Farm Bureau and a farmer from Madrid in St. Lawrence County.

Jennifer Karelus, Lewis County Farm Bureau president, said input is always welcome on how best to lobby government officials, and her board has three vacant seats.

County Manager Elizabeth Swearingin suggested the formation of a smaller group to get organized and present a clear message to state and federal representatives.

“You have to come to a consensus on what you want,” agreed state Assemblywoman Addie Jenne, D-Theresa.

Jenne said she heard several divergent opinions from speakers at the two-hour session but is looking for direction from farmers themselves, not just organizations like Farm Bureau or Cornell Cooperative Extension, on how best to combat low milk prices.

She mentioned ideas such as New York developing its own milk price support system or pushing for increased milk exports but said she is open to any and all suggestions.

“I just want us to pick a route, and let’s go,” Jenne said. “We’ve waited too long.”

She encouraged those in attendance to put her and her fellow lawmakers to work to help secure the future of north country dairy farming.

Extension webinar

Local farmers also attended two presentations about dairy markets issues and business management Jan. 12 at the Cornell Cooperative Extension of Jefferson County.

Andrew Novakovic, a professor of agriculture economics at Cornell University, Ithaca, presented anticipated market trends, industry problems and how elected officials can help farmers through a webinar hosted by the Cornell Cooperative Extension of Saratoga County, Ballston Spa. Jason Karzses, a farm management specialist for the university’s Pro-Dairy Program, followed with his presentation about operational statistics and business planning.

“It was very informative,” said John Peck, county legislator and owner of Peck Homestead Farm in Carthage. “It’s nice to get a professional opinion on how (the market) looks and where we’re going and where we’ve been.”

Several farmers and Novakovic claimed that elected officials need to introduce policies that help farmers manage their expenses and increase their consumer base.

Novakovic said farmers should encourage their elected officials to advocate for programs that help protect their liquidity and ensure they can pay their bills. He also said he hopes the new administration under President Donald Trump will preserve existing trade agreements and allow farmers to sell fat-based milk products to public schools.

Peck said preserving established foreign trade agreements prevents surplus and provides farmers with income they need to maintain their operations, adding that he hopes the new administration will establish stronger trade relations than the previous administration. He also said policies that protect liquidity would benefit farmers more than polices that recover profits.

“Liquidity is absolutely the problem with the dairy industry,” he said.

Greg Millick, owner of Golf Crest Dairy in Denmark, and Bernie and Marcia Gohlert, owners of Hilltop Farms in Lowville, said children need the essential nutrients in fat-based milk.

“We make a very wholesome product,” Millick said.

Novakovic’s claims about milk dumping received mixed responses from local dairy farmers, with many expressing their own concerns about the issue.

Dairy cooperatives have too much distressed milk when processing plants are closed on weekends and holidays, Novakovic said, causing cooperatives to dump the milk when they cannot afford to export it to out-of-state facilities. Novakovic said elected officials should create reforms that balance the milk market and lower the cost of shipping milk products.

Peck said the U.S. Department of Agriculture and other agencies should report more distressed milk data to determine the cause of dumping and the amount of milk cooperatives have dumped. Millick said that in addition to dealing with processing plants’ schedules, the lack of operating plants in the state has also increased milk dumping.

“There are a number of plants in the state sitting idly,” Millick said.

While farmers claimed they already knew many of Karzses’s suggestions, his presentation provided useful statistics and reinforced successful business management techniques.

According to his presentation, Karzses encouraged farmers to assess all areas of performance, know their finances and market trends, understand their financial risks and use financial risk tools and develop a “formal” business model. He also provided charts about net farm income, cost allocation and profitability among more than 150 surveyed dairy farms in 2014 and 2015.

Peck said the information was interesting because it showed the differences in cost and cost allocation between small and large farms. Millick and the Gohlerts said Karzses’s presentation served as a helpful reminder for managing their businesses.

“I think most farmers are running as efficiently as they possibly can,” Millick said, but “it’s always good to analyze the numbers and have the information.”

In addition to the suggestions from Novakovic and Karzses, Millick said elected officials should create policies that establish fair milk prices instead of polices that provide “handouts.” The Gohlerts said supporting institutions like Cornell Cooperative Extension and its educational programs and showing farmers’ challenges to the public are more valuable than government programs.

“It’s very difficult to be a farmer,” Marcia Gohlert said.

Marcus Wolf contributed to this report..

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