Small and mid-size dairy farms in New York and nationwide are disappearing, as farmers face a choice: Either scale up, or shut down.
Recently released agricultural census data illustrate the overall decline in the number of dairy farms, coupled with the consolidation of mid-size farms that are being squeezed by low milk prices and disruptions caused by weather and trade disputes.
Between 2012 and 2017, New York lost over 880 dairy farms across the state. In an eight-county area that includes the Capital Region, there were 100 fewer dairy farms in 2017 than five years earlier.
The data show the biggest losers have been mid-size farms.
The number of New York dairy farms with between 20 and 200 heads of dairy cattle fell by nearly a quarter in the five-year census span, while the number of farms with over 200 dairy cows grew more than 11 percent in the same time.
Nationally, there were 17 percent fewer dairy farms with less than 200 head of dairy cattle in 2017 compared to 2012, while the number of farms with at least 2,500 dairy cows grew 24 percent over the same time.
“One thing striking about the census is that sort of the middle-size, smaller to middle-sized (farms) are declining, shrinking in number, shrinking in importance in terms of overall contribution to the dairy sector, and the large-scale farms are increasing,” said Andy Novakovic, a professor of agricultural economics at Cornell University, a nationally known expert on the dairy industry. “The larger-scale farms are showing a greater ability to survive.”
Sales haven’t necessarily gone up for farmers, even as there are fewer farms. Dairy farmers in Rensselaer County alone collectively saw $3.1 million less in sales in 2017 than five years earlier.
And yet recent data for 2019 show dairy farmers are largely in a better place than they’ve been over much of the last four years.
Data from the U.S. Department of Agriculture show milk prices at this point of the year are up about 11 percent over last year, and in May were higher than anytime since 2014.
“2019 is significantly better than (2018). That says more about how lousy ’18 was than that ’19 is really that great,” Chris Laughton, an agricultural economics analyst with Farm Credit East, said during this month’s Milk Marketing Advisory Council meeting. “It’s kind of gone from terrible to mediocre.”
But the majority of gains dairy farmers might normally have seen from this sort of price increase have been wiped out by the rising cost of animal feed. With farm fields in much of the country flooded and out of production, the price of corn, soybeans and other feed crops has risen significantly for dairy farmers.
“Although 2019 is going to look good by itself, it isn’t enough to make up for the hole we dug going back to 2015,” Novakovic said. “The average farmer is not going to be losing money in 2019, but they’re not going to make up for everything they lost in the previous four to five years.”
Alan Chittenden runs Dutch Hollow Farm near Stuyvesant with his parents and two brothers. The operation is one of the region’s largest, with 750 dairy cows over 2,000 acres.
Chittenden pointed to the lack of corn and soybeans that have been planted as a result of flooding, and thus higher feed prices raising on-farm costs.
But he also noted that ongoing trade disputes ignited by President Donald Trump, who has sought more reciprocal trade relationships with countries like China and Mexico, have cut off some dairy export markets. That’s become problematic for dairy farmers, who export 10 to 15 percent of U.S. dairy products to foreign countries.
In an industry like dairy farming with notoriously slim margins, any disruptions to the market can throw things off, he said.
“Agriculture is quite often the sacrificial lamb for other areas,” Chittenden said. “(President) Trump didn’t help us any with any of his dealings.”
Another, smaller factor that’s depressed demand for dairy products is the rise of plant-based alternatives, like vegan “butter” or almond milk — products growing in popularity that could portend a shrinking demand for dairy products moving forward.
“These are volume sales that otherwise would’ve been milk and now are something else. It clearly has an impact,” Novakovic said. “There’s also a feeling that this is just the beginning. We’re looking at non-dairy yogurt, vegan butter … we’ve got plant-based ice creams. It kind of feels like the worst is yet to come.”
Chittenden and his brothers took over the farm from their parents, and while he said it’s difficult for young people to enter an industry facing slimming profit margins, he said the farm will again be passed down again to younger relatives in the family — despite whatever challenges farmers may be facing today.
“Its in their blood, it’s in my blood,” he said.
“It’s a challenge. You’ve go to love it to be in it,” Chittenden said. “That’s the way it is. That’s the way it’s always been.”
Source: timesunion.com
