March 10, 2013

Maine's dairy farms in twilight

The state's dwindling milk producers toil every day in operations that are particularly fraught with financial uncertainty. Is it any wonder some are closing the barn doors for good?

By Meredith Goad mgoad@pressherald.com
Staff Writer

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The light at dusk in January bathes Highland Farms in Cornish, a dairy farm owned and operated by the fifth generation of farmers. Despite federal and state safety nets, farms like this one struggle to make ends meet as prices for feed and fuel add to costs of production. Over decades, the number of Maine dairy operations has fallen precipitously, from 5,100 in 1945 to just 307 last year.

Photos by Gabe Souza/Staff Photographer

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Libby Bleakney, a fifth generation dairy farmer who runs Highland Farms in Cornish with her family, says keeping the operation going is more than preserving a legacy – it's in her blood.

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"Unless people want to pay $7 or $8 for a gallon of milk, this is the way it's going to be," Leary said. "The market is such that it keeps milk relatively affordable for consumers, but the dairy farm takes it in the neck."

PRICE-SUPPORT PAYMENTS

The state's dairy-relief program is designed to throw a financial lifeline to Maine's dairy farmers when the market gets unstable.

When dairy farms are paid less for their milk than it costs to produce it, they get a check from the state that comes from a pool of money funded by Maine dairies. The amount of the check is based on the federal minimum milk price and other factors.

The price-support payments are triggered at a set amount, depending on the size of the farm. For example, Maine's smallest farms are currently guaranteed $21 per 100 pounds of milk -- or $21 per hundred weight, as they put it in the industry. (A hundred pounds equals 11.6 gallons.) When they're paid less than that in the marketplace, it triggers a payment from the milk fund.

From 2007 to 2009, the state dairy safety net paid out $30 million to Maine dairy farmers, according to the last survey that looked at production costs. Historically, the program has helped save some farms: From 2004 to 2010, Maine lost 19 percent of its dairy farms, while Vermont and New Hampshire lost about half of theirs.

But now dairy farmers are faced with dramatically higher feed and fuel costs. That same small Maine farmer who is guaranteed $21 per 100 pounds of milk is finding that it now costs $30 per hundred pounds to produce it.

At that rate, farmers would need to get back a minimum of $2.38 a gallon from milk sold in Maine stores in order to break even, according to the Maine Dairy Industry Association. But in January, they were paid $1.91 per gallon. (Some farms could get more because of negotiated premiums and cost of production adjustments.)

For its part, the federal price-support program provides only "pennies" to Maine dairy farmers, said Tim Drake, executive director of the Maine Milk Commission. Most farmers view it as better than nothing, but it's not enough to help them break even.

"When you're losing $10 per hundred weight," Drake said, "2 cents really doesn't do much to help."

Farmers took another hit earlier this winter when Garelick Farms, a Bangor-based dairy processor, closed down, leaving only two large dairies in the state to purchase their milk -- Oakhurst and Hood. Garelick had been contributing about $50,000 a month to the state milk fund, so that money is lost; the other dairies do not have to make up the difference.

And if the milk Garelick Farms bought now starts going to processors outside of the state instead of a Maine dairy, that could mean losing even more money from the fund.

Bleakney said the checks from the state's dairy-relief program have been a big help to her farm over the years. But now the price of Midwest corn has jumped from $5 to $6 per bushel up to $8 a bushel, "and we all know what the fuel prices have done."

"It's been very difficult the last few years with the price of fuel, the price we pay for our grain that we feed our animals because of the drought in the Midwest," Bleakney said. "That had a huge, huge impact on our costs."

Bleakney says those "input costs" should somehow be figured into what dairy farmers are paid to better reflect the marketplace.

Commercial dairy farmers have been working for years on a better milk price-support formula to pitch to the U.S. Department of Agriculture, Bickford said. But the agency has been reluctant to open a hearing on the matter as long as Congress is still discussing the farm bill, and large industrial milk producers are not pining for it.

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Additional Photos

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Alison Leary carries equipment as she milks some of the 17 remaining cows at her family's farm in Saco last month. Because of low prices for milk and soaring production costs, her father, Tim Leary, has opted to close the 500-acre Leary Farm, the last commercial dairy operation in the city limits.

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Alison Leary squirts a stream of milk into the mouth of her Australian cattle dog, Pepper, during morning milking chores last month. After the Saco farm closes its dairy operation, she plans to keep a few cows to produce enough milk to make products such as cheese and yogurt.

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