This commentary by Roger Allbee, of Townshend, the recently retired CEO of Grace Cottage Family Health and Hospital in Townshend. He is former secretary of the Vermont Agency of Agriculture, Food and Markets. He has also served on the professional staff of the U.S. House Committee on Agriculture, and he has chaired the Animal and Animal Products Advisory Committee to the U.S. secretary of Agriculture and the U.S. trade ambassador.

[T]he Vermont seal is the only state seal that recognizes the dairy industry. While plows appear on 13 and sheaves of wheat on nine, Vermont stands alone in recognition of its dairy industry.

Dairying has never been easy and always has been subject to change over time. After the demise of the world class merino sheep industry in the 1800s (caused by the loss of protective tariffs and an inability to compete with Western low-cost producers) farmers turned to butter and cheese production. By 1880, Vermont was considered to be the butter capital of the world, with St. Albans producing one fourth of the butter in the state. Whole industries grew up around butter and cheese. Before 1915, at the peak of the butter trade, nearly 300 butter and cheese plants were operating in the state, with almost every town having a creamery nearby.

The growth of cities like Boston and New York required an increasing amount of fluid milk for their residents. However, there was not agreement among Vermont dairy farmers and their leaders at the time to respond to this need. Some argued that milk should be kept in Vermont, and that shipping it in fluid form out of state would lead to the closing of cheese and butter plants (which it did), as well as fair pricing issues to farmers (first milk train left Bellows Falls in 1890 to Boston). During this time, consumption was projected to grow in the urban areas, as it did for many years.

Becoming a fluid milk producing state did create major hurdles for farmers, especially relating to pricing and new interstate sanitary standard requirements. Due to considered unfair pricing by buyers, action was taken to further help dairy farmers. Congress passed laws such as Capper-Volstead in 1922 for limited anti-trust protection against price fixing by farmer cooperatives. Special financing programs were created with the Farm Credit Acts (special financing for farmers and their cooperatives). And, in 1937 the Agricultural Adjustment Act was passed allowing farmers to form and participate in federal market orders, after the stock market crash and disruption to the farm economy in the late 1920s. In that same year, a conference of dairy leaders from New England, organized by the governors, approved for the first time, the federal control of milk pricing through these orders that still exist for conventional milk today with federal milk market orders. In 1982, the parity pricing concept for milk that was enacted in 1949 to assure a base of pricing at the farm, was eliminated by Congress. This resulted in the further price deregulation of the U.S. dairy industry, with wide price swings at the farm level that exist today.

Even at the state level many programs were enacted to mitigate the impact of poor returns on dairy and other types of farming. These have included the 1978 Current Use Tax Program, the 1987 Vermont Housing and Conservation Board for purchase of development rights, an agricultural loan program though the Vermont Economic Development Authority, cow power, higher rates for farm-produced energy, financial and technical support for those farmers interested in converting to organic production, the Farm Viability Assistance Program, and, more recently, the Working Lands Enterprise Program.

What is happening in the dairy sector today is well-documented. The declining consumption of fluid milk; the rapid growth in alternative beverage products; the dependence on export markets for better pricing in a very competitively dependent arena with reliance on Mexico and Asian demand; the westward movement of production; consolidation and increase in size of farms, both conventional as well as organic; fewer milk product buyers and sellers; and the inability of farmer-owned cooperatives to capture higher raw product pricing for their owner/members, as was envisioned when the farmer cooperative movement was established in the early 1900s. Also having a financial impact is the increasing public pressure for quick fixes to water quality problems resulting from farm practices, some that were encouraged and supported by federal programs of the past, as indicated in Rep. Carolyn Partridge’s article. This all results in downward pressure on farm prices.

Adjustment has never been easy. Vermont dairy farmers, and some of their cooperatives have demonstrated resilience in the past. It will require continued new thinking and possibly new products beyond fluid milk in a declining and very competitive fluid milk market. It will take many working together across the political and economic spectrum. It is too important a sector for our economy, the tourist trade, the working landscape, and our sense of who we are as a state to do otherwise. The dairy cow on the state seal remains important, as does clean water and good soil health. All should be achievable.