State hopes consumers will pay more
for milk, make donations to farmers
Got milk?
Got a little extra money to pay for it? And by the way, wanna donate cash for a T-shirt?
Those are the questions Vermont’s Agency of Agriculture is putting to the public on the new Web site it’s unveiling today at a press conference at the Conant Farm in Richmond.
The site, http://www.keeplocalfarms.org/, encourages people to make direct donations to the New England Family Dairy Farms Cooperative. For $30, donors get a Keep Local Farms bumper sticker; for $250 “dairy defenders” get a bumper sticker and a T-shirt. Tote bags are available for a $100 donation. (Contributors should know, however, that these donations are not tax-deductible, as NEFDFC is not a 501C3, IRS authorized public charity.)
In addition, officials hope to use the certified fair trade model to encourage consumers to pay a small surcharge for milk products from retailers, hospitals and colleges that participate in the Keep Local Farms program.
The idea is to put more money in farmers’ pockets at a time when dairy farmers are losing hundreds of dollars every day they stay in business.
For every $3 gallon of milk sold at a grocery store, the farmer gets 90 cents. The kicker? That gallon cost $1.80 to produce. In addition to record low milk prices, Vermont farmers are facing higher-than-ever input costs for grain, fertilizer and supplies.
Keep Local Farms products would bear the program logo, and would be marketed in the same way fair trade products like coffee and chocolate, are promoted. The money would be collected by NEFDFC and distributed to the 75 percent of farmers who are members of the cooperative (lifetime membership is $5), according to Jenny Bourbeau, of the New England Dairy Promotion Board.
Officials couldn’t say how much retailers and colleges would be asked to charge, nor could they say how much money they hope keeplocalfarms.org will generate.
Three universities and one major retailer have expressed interest in the program, according to Jacques Parent, a member of the board that oversees Keep Local Farms.
The agency says it has conducted studies that show the milk-drinking public is willing to shell out a little spare change for dairy products to keep farms going. Though how much they’re willing to spend seemed to be something of a mystery. Officials I spoke with, Bourbeau, Parent and Kelly Loftus, the communications director for the agency, didn’t know what the Keep Local Farms surcharge fees would be.
“We did some studies with consumers two or three years ago and it was found that consumers were willing to pay more for a gallon of milk if they knew that that extra money was going directly to the farmers,” Loftus says. “We’re working with hospitals and universities to incorporate this program into their food service aspects.”
Loftus says the state doesn’t have the money to step in this time to help tide farmers over in this dairy downturn the way it did in 2006 when prices hit a trough. Keep Local Farms is an alternative to state support, she says.
“We don’t have that financial flexibility and that’s not a long-term fix,” Loftus says.
When asked whether the web site will make a difference for farmers in the coming months, Parent, a farmer from Highgate said it’s worth a shot.
“It could be a real big deal or a big flop,” Parent says. “It’s going to depend on public opinion.”
I hope this works for farmers and that someone will determine its success by keeping track of the dollars that flow to farmers. If nothing else, it should raise public awareness of Vermont dairy farmers’ dire plight.
The belief held by some, that the dairy industry in Vermont should be allowed to die is a dangerous and misguided one. The fallacy lies in the long-held belief that real added-value businesses can be done cheaper and better elsewhere. In the case of dairying, the expressed belief is that Wisconsin and California can do it better and cheaper with their large landmasses and supposed economies of scale. However, agricultural economists have long argued that scale plays little in agricultural economics. Profit and benefit are more accurately determined on a per-cow basis and on the quality of farm management, and that the accelerating costs and food safety risks of long haul transport now and in the future will outweigh any geographic economies of scale.
For several generations now, this economic argument and the remote availability of cheaper labor have leached Vermont and other states of their indigenous added-value manufacturing and processing businesses and infrastructure and the destructive results are now being felt. It is given even greater urgency by the recent work done by the Vermont Council on Rural Development in their thorough study of Vermonter’s values and the components that make up their perception of quality of life in Vermont. The number one value expressed by over 5000 Vermonters sampled from a broad range of social and economic sectors was the working landscape characterized by both farm and forest. For some reason, however, many Vermonters and their leaders seem not to have made the connection between the economic engines of agriculture, tourism marketing and the cherished beauty of the working landscape.
Consider the following facts:
Vermont agriculture for the last 100 years has been the defining element of Vermont’s working landscape and its economy.
The new American consciousness of food safety, food quality and proximity to market is driving massive changes in our food systems, as is an emerging appreciation for locality (terroir) and artisan production methods in which Vermont is an internationally recognized leader.
The real economic impact of all farming in Vermont amounts to $3B annually, of which dairy accounts for $1.89B, according to a 2001 study done by the University of NH in which the radiant economic impact on a per cow basis was found to be $1400. With 135,000 cows, this amounts to $1.89B in dairying alone. The figure includes energy and fuel consumed, agricultural support industries, total employment and taxes paid, as well as intrastate economic market activity. It does not include the evident spin-off effects of tourism. Count the number of images in Vermont Life or other tourism publications that are of Vermont’s working landscape and its people. 15,300 Vermonters are employed directly or indirectly in agriculture, of which 7500 are on farm and 7800 are in agricultural support industries like feed supply, transport, equipment, veterinary etc.
Vermont produces 63% of the New England milk supply, over 2.5 billion pounds of milk a year.
The jeopardy to Vermont dairying and to our expressed vision of ourselves is quite simply that Vermont farmers, like their colleagues in Wisconsin and California, are paid less for their milk than it costs them to produce it. Solve this problem and we have killed three birds with one stone. We will have preserved the working landscape, which Vermonters value so highly see (insert VRDC link), we will have preserved a major element of Vermont’s waning economy, and we will have maintained the defining elements of Vermont’s powerful brand.
First of all, congratulations to Anne Galloway and VTDIGGER for providing great investigative reporting and evoking such comprehensive and authoritative responses from Bill Schubart and David Usher. I don’t think this dialogue could have occurred anywhere but on these webpages. That said, if dairy farmers all over the US suffer the same disparities between expenses and revenues, how can any of them possibly continue dairying? And where does the surplus come from if no one can afford to produce milk? (I mean, how long can you remain solvent if your costs are double your income?) Dairy farmers have been struggling for all the 33 years I’ve lived in Vermont; most of the farms in my neighborhood have disappeared, and I would have expected all of them to have gone out by now. David’s previous comment on the cost of production agrees with the assessment of a late Irish friend, a dairy equipment executive, business consultant and farm owner, who told me, after a swing through the Champlain Valley, that it didn’t seem to him Vermont had any farms big enough to be profitable. Yet Bill tells us that Vermont still produces 63% of New England’s milk supply. Are the farms producing this supply living on borrowed time (and money)? Have we got a great dairy crash to look forward to? Maybe the Vermont dairy industry is consolidating, as the wool industry did 150 years ago, contracting into closely held monopolies. Will this amount to a bubble that, like the great Merino mania, will eventually burst? Nationally, are there milk-producers who can afford to absorb what look like catastrophic losses and wait for their competitors to go out of business? Is someone out there making money at everyone else’s expense? I know a couple of dairy farmers (small ones, not “someones”) who are doing well selling an organic product at premium prices. Is this widespread in Vermont, and is their product included in Bill’s 63%? Is organic farming a niche endeavor or the future of dairying here?
According to the Boston Herald (September 14, 2009) three New England states are urging consumers to “chip in” and help save the region’s dairy farms, which are struggling with record-low prices being paid for their milk. Agriculture officials and farmers from Vermont, New Hampshire and Massachusetts—there are no dairy farms to speak of left in NH or MA so agency officials there have nothing to lose by signing on—gathered Monday at a dairy farm in Richmond to launch the Keep Local Farms program. Organizers have set up a Web site — at http://www.keeplocalfarms.org — for people to make contributions, which will be divided among farmers. Under the program, they’re urging universities and other institutions to charge “a little extra” for dairy products in their cafeterias, with the proceeds going to farmers. The University of Vermont is the first to sign on.
While this may sound like the Vermont Agency of Agriculture is doing something to help farmers, the program’s goal is to produce an impression of action where virtually none exists.
Let’s do the math. Vermont dairy farmers make $2.6B lbs of milk for which they are receiving on average about $9/cwt less than it costs them to make. This year, the worst in memory, they will lose $9 x 26M cwts or $234 million. There are 600,000 people in Vermont. Assuming for the moment that they are all milk consumers and that they all want to pitch in, they would each need to send $390 to the program. To some, this may not seem like paying a “little more” but so far, we have managed to help the farmers just to break even. If 600,000 consumers wished through the goodness of their hearts to help the farmers actually live and work as middle-class, consumers—that is, every man, woman and child—would have to contribute another $390. The recently study from the Council on the Future of Vermont reports that farming is important to 97% of respondents: does this program appeal to you?
The flaws inherent in the program do not stop there. The web site gives us a picture of dairy farming to match ancient, popular preconceptions: lots of smiling farmers and clean cows standing before nicely painted red barns their happy children romping with puppies in verdant pastures. Consumers won’t see a problem: will they open their wallets to help when things on the farm appear so rosy?
For the curious, the problem is defined: an antiquated pricing system, designed in the Depression, is unfair to Northeastern farmers, whose costs are typically higher than their Midwestern competitors because our farms are smaller, less efficient. Low prices threaten to put these honest, hard-working families out of business and threaten our supply of clean, fresh milk. As usual, it is not their fault and they need your loose change. Nowhere is there mention of the fact that American dairy farmers produce 9B lbs of milk in surplus over demand or that per capita milk consumption in the US has been steadily falling for thirty-five years or that these two facts alone are what drive low milk prices or that production is within the dairy farmers’ collective control or that supply control is anathema to them.
At their most cynical, the authors of the program also suggest that to justify to themselves paying “a little extra” for local milk, consumers might borrow the notion of Fair Trade pricing from coffee, for which they are now accustomed to paying extra. The people who wrote this program apparently do not understand the promise underlying the program, which is that the manufacturers of [this or that commodity] have guaranteed their producers a living wage. The Save Local Farms program offers no such guarantee to Vermont dairy farmers who are, in fact, $240M south of the point where the concept can even be invoked, let alone put into effect.
Call or write your legislator and demand that the Agency of Agriculture put a stop at once to this officially sanctioned, nakedly hypocritical bid for public sympathy and introduce in its place legislation to mandate supply controls.
James Maroney
Leicester, VT
While some of the previous comments account for the benefits of dairy to the State of Vermont, I hear little talk of its costs. First, there is the preferential tax treatment in a state with a financially downwardly spirally education establishment funded primarily by a tapped-out property base. Then there are the environmental impacts, which are profound. I am not sure how many more lakes, ponds, rivers, and bays need to be compromised before the state’s real economic engine–tourism–is threatened.
I don’t believe anyone wants to see the “death of dairy,” but if its existence requires the “death” of our waterbodies, and the economy dependent on clean water, not to mention our health, perhaps we stop sending the government money to an industry that cannot seem to make itself profitable, and instead use it to clean up the havoc that has already been wreaked over the last two centuries by agriculture and proactively address the impacts on the horizon from the decades of virtually unregulated use of the herbicide Atrazine, which is still accumulating in Lake Champlain.
I am not sure where other contributors here have gotten their data, but this is what my research shows. At 1.6 percent of our gross state product (and this includes all aspects of agriculture), according to the US Department of Commerce, the real positive impact of dairy here is long past. All of agriculture, that includes forestry and mining, employs less than 3 percent of the population. And with respect to our significance to the industry, we rank a distant third in the main market of Boston-New York City–contributing 10 percent of the supply, with 45 percent coming from New York and another plus 30 coming from Pennsylvania. It is likely both NY and PA would be happy to supply that 10 percent, as well, not that I suggest this happen. I hardly believe though that the nation’s milk supply hangs in the balance. Maple syrup is another matter.
No industry in Vermont should be exempt from environmental regulation, and it stands to reason, most dairy operations would already be gone if held to standards similar to that of other industry.
In some cases, the only thing left is the emotion and the myth, as reflected in the Rural Vermont study, and, of course, as reflected in reality, the pollution, insolvent farms, an over supply of product, and an inadequate state tax base.
When a cow is no longer fit for milking, what does the farmer do?
Sincerely,
James Ehlers