Business & Economy

Report: Vermont dairy farms have $2.2B economic impact

There are fewer conventional dairy farms than ever in Vermont, but those that remain have a big impact on the state’s economy, according to a new report.

One hundred years ago, Vermont had more cows than people. That’s no longer true: In 2012, the state had roughly 134,000 dairy cows and about 626,000 people.

That one in five ratio belies just how important dairying is in Vermont, according to an economic assessment conducted by the Vermont Agency of Agriculture, Food and Markets and the Agency of Commerce and Community Development.

Each one of those cows generates $12,500 in economic activity, and overall value of dairy farming to the Vermont economy is $2.2 billion.

The annual sale of dairy products — cheese, milk, butter, yogurt and ice cream — adds up to $1.3 billion.

The report, “Milk Matters,” was paid for by the Vermont Dairy Promotion Council, which is funded through an assessment on the price of milk.

Sixty-three percent of all milk produced in New England comes from Vermont, and dairy represents 70 percent of all agricultural sales in the state. Between 6,000 and 7,000 jobs are tied to the dairy industry in Vermont.

Other sectors of the agricultural economy, such as vegetable farming, poultry and resale of livestock don’t begin to compete with scale of dairy’s economic impact. Vegetable farming represents 2.7 percent of agricultural products sold, while dairy is 65 percent.

Vermont’s farming landscape is a dairy farming landscape and the state’s “physical beauty” drives tourism and recreational sports like hunting, snowmobiling and skiing, state officials say. About 13.5 million tourists visit Vermont every year.

But the state’s farms have disappeared over time, thanks in large part to the fluctuation in milk prices and the high cost of producing feed in Vermont’s cold climate.

Five years ago, there were 1,025 dairy farms. That number has dwindled to 868 in all. Eighty-two percent of farms are small, that is to say they have 200 or fewer cows, according to the report. Only 2.8 percent, or 25 farms in Vermont, have herds of 700 or more. Mid-size farms that have 200 to 699 cows make up 15 percent of the total.
And 67 percent of Vermont’s farms are located in three counties, Franklin, Addison and Orleans, according to the report.

Volatile milk prices make farming an uncertain business, and state officials say that factor will continue to put the viability of Vermont farms at risk. The state will be enforcing water quality rules to protect Lake Champlain and there is a worry that changing agricultural practices could have an impact on farms. The average age of the Vermont farmer is 55 years old, and transitioning farms to the next generation is another challenge that could result in more farms disappearing.

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  • Alice Allen

    And no one from VT Digger covered the Fairness Hearing on the NE Dairy Antitrust case last week at District Court in Burlington with Judge Christina Reiss presiding? This is year number six in this case. It would have been worth
    VT Digger’s time and effort to attend.

  • David Ellenbogen

    For a truly complete economic assessment, wouldn’t it make sense to include the cost of environmental degradation that is associated with dairy farming?

    • Bruce Post

      That is a very useful suggestion. Essentially, it is called “external diseconomies.” A production process generates effects — beneficial and not-so-beneficial. For instance, before the Clear Air Act was passed, air pollution and sulfur dioxides from coal generating plants in the Midwest often settled on the environs near the plants. Then, with the passage of the Act, power companies built taller stacks, which had the effect of cleaning up the environment in their back yard and exporting it to our back yards here in the Northeast. We got acid rain, which had a negative consequence and cost for our forests and lakes.

      So, Mr. Ellenbogen, you are right on the mark calling for a complete economic assessment. Thank you.

    • Matt Fisken

      probably not if you are selling or promoting milk products.

    • Yes, this would be helpful to know. But, perhaps as testament to the power of bi ag and our tendency to miss the point, no studies like you allude to seem to exist. Amazing as it may seem, web searches looking for “economic impacts of pollution from dairy farms” and variations of that theme turn up zero relevant results ( whether the word “Vermont” is added or not).

      Am I therefore correct in saying that it seems that we have really no idea what the economic costs are to our state or our society? In other words, have we no clue what we actually lose out on (in terms of revenues, reduced property values, etc.) and what we have spend to mitigate the known health and environmental effects of this pollution?

      Of course, the same can perhaps be said for the costs associated with combined sewer overflows or urban runoff or CAFO antibiotic use or runoff from fields where sewage sludge is applied or soil loss, etc., etc. All we can apparently do is guess at these things too. Might this reflect how skewed our priorities are? We can afford endless war, billions in corporate welfare, vast swaths of uninsured or under insured neighbors, for-profit education, etc. but we can’t point to even one study that definitively details how much something like conventional dairy costs us.

      Perhaps someone else can chime in with some numbers. Do we have even the roughest estimate?

      That said, why do I suspect we would be shocked if this information was known?

  • Gary Murdock

    “Between 6,000 and 7,000 jobs are tied to the dairy industry in Vermont.”

    That all sounds wonderful…but when 2000 of those jobs are illegals sending money home to Mexico, it stops sounding so wonderful. Source: Digger article from 2012.

  • Judith McLaughlin

    868 Dairy farms in Vermont, generating 1.3 billion in sales of dairy products.

    That’s breaks down to 1.5 million dollars for each dairy farm (on average).

    Even if each dairy farm had 90% in expenses, that would leave each dairy farm $150,000.00 a year in profit.

    Don’t say “poor farmer” to me again. Ever.

  • Judith McLaughlin

    868 Dairy farms in Vermont, generating 1.3 billion in sales of dairy products.

    That’s breaks down to 1.5 million dollars for each dairy farm (on average).

    Even if each dairy farm had 90% in expenses– that would leave each dairy farm $150,000.00 a year in profit.

    We need to understand Vermont has changed, and the idea of “poor farmer” is long gone. It is an industry, simple as that. We need to treat it like an industry, and only then, will we all come up with the solutions that are necessary to clean up our waters.

    • Nat Bacon

      The 1.3 billion dollars in sales does not relate to dairy farm income, so your $150k profit per farm is incorrect.
      The sales number is for processed dairy products like cheese, ice cream etc sold by processing companies like Cabot and Ben & Jerry’s. Dairy farmers (both conventional and organic) are paid for bulk raw milk, at commodity prices.
      Typical net farm incomes are much much lower than $150k per year, most farmers (both conventional and organic, James Maroney) struggle financially. That is why farms grow, to try and generate more income, and also why farms often do not have enough cash to make all the conservation improvements needed (why they need state assistance).
      If you don’t believe me go volunteer at a dairy farm for one day, you will be amazed at how hard the work is.
      We have all benefitted from incredibly cheap food in this country, and beautiful open lands in Vermont, on the backs of farmers.
      Absolutely farmers need to make sure they are not polluting the state’s waters. They deserve our support, not criticism, in keeping Vermont what it is.

  • Steve Merrill

    2,000 Illegals? Last “estimate” I saw in the BFP was 2-3,000. Up here in Orleans County we have one Mud Creek, the 2nd most “impaired” brook in the state thanks to the LFO’s beating rented land like a rented mule. They removed some 30ft. of riverbank to allow MORE runoff into the river and we showed them back in 2007, the state did nothing, and they “grow” continuous corn in semi-dead soil with no worms or life left in it. When are we going to admit that liquid manure is a disaster? When are we going to mandate either cover crops or disallow the corn next to rivers and streams? We are never, and the lake will be green from Memorial Day to Labor Day, choked with algae, while we scratch our heads and wonder why the “farmers” are getting away with “conveying” their pollutants to it. SM, North Troy

  • Steven Farnham

    “Between 6,000 and 7,000 jobs are tied to the dairy industry in Vermont.”

    Just imagine what it would be like if farmers were paid somewhere near what it costs to produce milk, plus enough to pay decent wages and benefits to employees.

    Would those 6,000 to 7,000 jobs then be worth a $2.5M gift from the governor, or are such gifts reserved only for the Governor’s dear close friend, the Crown Prince of Abu Dhabi?