Where Have All the Dairy Farms Gone?: The Milk Market Catastrophe
In 2015 a Pennsylvania dairy farmer was getting paid around $25 per 100 pounds of milk (around 12 gallons), which was near an all time high for milk prices. As of now this same dairy farmer has gotten as low as $10 per 100 pounds of milk. To put this in an even larger perspective, out of a gallon of milk that costs $1.50, that farmer will only receive about 7 cents of that.
The American dairy industry has been at a steep decline in the past 2 years and the drop in milk prices has become an epidemic that has eradicated at least 1,600 dairy farms in 2017 alone. Many of these are family dairy farms that have lasted for generations who were unable to weather the storm that was the tremendous drop in milk prices over the past 2 years.
In addition to the drop in milk prices, the price per animal sold on the market has been cut in half. An animal worth $1,500 just 18-24 months ago will now often sell for $750 or less.
The Why?
There are too many reasons to name why this decline has happened here in the states, but I will give you a few.
The rise in soy milk and almond milk sales has most definitely hurt cow milk sales but it is not the killer of the cow milk industry as many people may speculate. Conventional cow milk sales have plummeted, but with this we have also seen an increase of sales in organic, NON-GMO, grass fed, and other specialty milks.
Now you might ask, “Why don’t farmers just switch to producing one of these specialty milks then?”. Trust me, IT IS NOT THAT EASY! Let me explain:
Organic and NON-GMO feed prices are much higher. When feeding an animal organically, you can easily expect to pay nearly twice as much for an organic version of a conventionally grown feedstuff. Just as you may see a double in price for an organic avocado at your local whole foods as compared to its conventional counterpart. NON-GMO feed prices aren’t quite this steep but are still more expensive and are also much more difficult to find. NON-GMO crops are hard to come by because so many of the major crops such as corn and soybeans are largely GMO products because of their yields and resilience.
Transitioning land takes 3 years. To transition ground, where a farmer has used chemicals and fertilizers to help raise a crop, they have to wait 3 years until that ground has not been touched by a foreign substance before they can grow and organic crop on that ground. During that time their crop yields will decrease due inability to fight weeds, insects, and animals (mostly deer, deer are just the worst), all the while having to buy outside feedstuffs at a larger price point than what they would if they could raise an feed an organic crop themselves.
The specialty market is becoming saturated. Many farmers did jump on the NON-GMO and organic train because the price for their milk is significantly higher. The only problem with this, as we see in all industries, the market became flooded (almost literally). Farmers transitioned to a specialty milk, paying more for organic feed, transitioned land, transitioned animals, only to find out, there was nowhere for the milk to go. Everybody had the same idea, and it was too much too late. The world milk market has drastically changed. For anyone who pays attention to the world milk market (it’s okay, I know you don’t), you would have seen that that in the past year or so, Europe has removed their limit (quota) on how much milk a European dairy farmer can produce due to contracts with countries in Asia (mostly China). So, with the European Union having nearly 24 million milk cows, now milking more than ever, the world market is being flooded by European milk and now competing with the U.S. for contracts with other countries who lack in milk producing cows.
On top of the massive change in cow milk consumption and consumer driven market, the world market has changed drastically in the past 18 months. For anyone who pays attention to the world milk market (it’s okay, I know you don’t), you would have seen that European Union has removed their limit (quota) on how much milk a European dairy farmer can produce. So, with the European Union having nearly 24 million milk cows, now milking more than ever, the world market is being flooded by European milk and now competing with the U.S. for contracts with other countries who lack in milk producing cows. With less imports leaving the U.S. and less consumers drinking conventional cows milk this is the exact and perfect definition of a double whammy.
What Can Be Done?
From this point on, the journey of the American dairyman is going to be a long and hard one. It used to be that if a farmer worked hard from sun up to sun down, never took a vacation, employed only family for as cheap as possible, that farm could survive and thrive. Now with all industries being driven by the consumer almost entirely, a farmer must work as smart as he does hard. This means jumping on trends as early as possible, being transparent about their farm operations, and welcoming and grabbing ahold of change. If you know any farmers, you know that this way of life seems foreign to them. For men who have worked their tails off from the time they were old enough to walk, this change to an almost entirely consumer driven market is one that they don’t know how to handle.
As a consumer, if you want to make a difference in the dairy industry their is more that can be done than just buy milk. The name of “cow milk” has been drug through the dirt for the past few years and in many ways unfairly. For marketing purposes, many alternative milks have pushed false assumptions about milk to help to increase their sales. And just because I feel it necessary to set one thing straight about the propaganda against the dairy farmer:
THERE WILL NEVER, I REPEAT, NEVER BE TRACES OF ANY ANTIBIOTIC IN YOUR MILK OR MEAT BOUGHT AT ANY STORE ANYWHERE, EVER
Being the son of a dairy farmer and being a part of the dairy industry for the majority of my life, this all is something that I feel a necessity to share with the public. Farming has been a staple in the creation and growth of this country since it’s inception and is in dire need. Pass this along and who knows, maybe educating yourself and others could help save that farmer just down the road.