[T]he number of dairy farms in Vermont is down to around 675, according to the Vermont Agency of Agriculture, which presented statistics to lawmakers this week on the expected impact of the proposed St. Albans Cooperative Creamery merger with Dairy Farmers of America.
Another 25 are expected to close by the end of the year, said Diane Bothfeld, director of dairy policy for the agency. That number is in line with recent declines in the industry caused by a number of factors, including years of low milk prices. In 2011, there were nearly 1,000 farms in Vermont. The agency has estimated that 10% of Vermont’s dairy farms stopped operating in 2018.
Bothfeld told lawmakers that 25 dairy farms closed in Vermont between January and July. But she said she’s optimistic the pace of closures will slow because the long-running drop in milk prices has leveled out.
Bothfeld met with lawmakers this week to discuss the proposed merger of St. Albans Co-op, the largest dairy cooperative in the state, with Dairy Farmers of America in Kansas City, Kansas. The St. Albans Co-op board voted in June to recommend the merger; its members will get a chance to vote on the proposal July 29. If it’s approved, the merger is effective Aug. 1.
In her presentation, Bothfeld said the merger would have no impact on the number of dairy farms in Vermont or on how much Vermont farmers are paid for their milk. She said if the merger is approved, it will preserve a market for farmers that otherwise might disappear.
“The important thing about this merger is that the farmers in Vermont have a place to sell their milk,” she said after the meeting. “If the vote is a ‘no’ vote, St. Albans Co-op just has to cease operations, all of these farmers have no place to sell their milk — a difficult place to be.”
Four dairy cooperatives now operate in Vermont: DFA, St. Albans, the Massachusetts-based Agrimark, and the organic Upstate Niagara Cooperative Inc. of Buffalo, New York.
About 3,000 dairy farms nationwide closed last year, a drop of about 6.5%, according to the U.S. Department of Agriculture.
In Vermont, policymakers are struggling to come up with ways to help dairy farmers stay in business. The Vermont Working Lands Enterprise Initiative has singled out biomass markets and dairy farming as two areas of priority for its grants program, which this year awarded more than $800,000 to businesses.
For the fiscal year that started July 1, the Legislature approved $1 million for the Working Lands initiative, and $500,000 of that will go to dairy farm-related projects, said Lynn Ellen Schimoler, who works with the organization’s board.
Low milk prices are just one of many reasons dairy farms are struggling, said Bothfeld. Many dairy farmers are nearing retirement age; according to a 2017 survey by the National Young Farmers’ Coalition, farmers over the age of 65 now outnumber farmers under 35 by a ratio of 6-to-1. The group said nearly two-thirds of U.S. farmland is managed by someone over the age of 55.
Vermont farmers also cite environmental regulation, poor broadband service in rural areas of Vermont, and other factors as reasons why it’s too difficult to operate a dairy farm.
“It’s a lot of personal decisions” that lead farms to stop operating, Bothfeld said. “Finances is certainly one of the things, but if they are 80 years old and tired of milking cows, that’s another reason.”
Like other commodity prices, milk prices rise and fall based on national and even global supply. The latest drop in the nationally calculated milk price, which has lasted for five years now, is directly linked to an increase in milk supply over the last several years. The Vermont Dairy Commission recommends a national price stabilization plan as a way to insulate farmers from the milk market cycle.
Five years of low prices is unusual. The milk price cycle usually runs from low to high over three years.
“The farmers who are remaining are extremely good managers,” Bothfeld said. “They have weathered this financial storm of five years of lower-than-average milk prices, and that’s a long time to have your pay trimmed.”
Bothfeld noted that as older farmers retire, there appear to be plenty of young ones who want to take their place. A scholarship program at the University of Vermont and Vermont Technical College helps young people earn a degree in dairy herd management, a program that is full every year, Bothfeld said.
The difficulty is in finding the means to buy a farm. “It’s an uphill battle,” she said. “But each year, there are young people who end up farming. I’m amazed sometimes, but here they are.”