New research shows that for the past 20 years, the US has had dairy policies aimed at increasing milk production and export markets.
According to an analysis by Food and Water Watch (FWW), the average American dairy only made a profit twice in the last 20 years, even though milk production went up by almost 40%.
Most farmers haven’t made more money from milk, and American shoppers haven’t paid less because milk prices have stayed low and production costs have gone up. This is so that US exporters can compete on the global market.
In the last 20 years, US dairy exports have grown by a factor of eight, which is more than almost any other commodity. At the same time, the FWW report says, the industry as a whole has been rapidly consolidating.
The US Dairy Export Council (USDEC) says that booming exports have helped farms of all sizes, but between 1997 and 2017, about two-thirds of family-sized commercial dairies disappeared as factory farms, exporters, and a few powerful cooperatives took over the dairy industry. The people in charge of trade associations are making a lot of money while small farms fail.
Monopolies in the dairy industry are also bad for the environment. Even though the number of cows has stayed the same since 1990, the FWW report found that methane emissions from dairy manure have more than doubled since then. This is because of how factory farms handle their waste.
It warns of a “vicious circle” in which low and volatile milk prices make it hard for family farmers to make a living and force them to “get big or get out.” In other words, the only way for many small farms to stay in business is to grow their herds and turn into factory farms, which increase greenhouse gas emissions and threaten the quality of the air and water, or to sell out to mega-dairies, which do the same things.
The FWW report, Economic Cost of Food Monopolies: The Dirty Dairy Racket, says that overproduction needs to be stopped because current state and federal dairy policies are driving family-scale farms out of business and adding to the climate crisis.
Rebecca Wolf, a food policy analyst at FWW, said, “The big picture of the economic cost of dairy consolidation is that it’s a story about farmers losing their jobs and going through hard times, and the environment getting worse.” “But it wasn’t always this way, and it doesn’t have to be this way. We need to reject false solutions and instead change policies to help farmers, the environment, and the US economy.”
The US dairy industry has consolidated faster than any other agricultural industry, with the exception of hog and egg production. At the farm level, there are fewer farms and more mega-dairies. At the processing level, there are fewer but larger corporations and cooperatives that buy, process, and sell dairy products.
Analysis of USDA data shows that between 1997 and 2017, the number of dairy farms in the US dropped by more than half, while the average number of cows per farm went up by 139%. More than 70% of the milk made in the United States comes from farms with at least 500 cows. The biggest dairies have herds of more than 25,000 cows.
Larger farms are less likely to let their cattle graze. Instead, they buy feed for them, which is the source of the most greenhouse gases from industrialised agriculture. Also, factory farms store manure in liquid form, which makes it easier for methane to escape. This is different from field cattle, whose manure breaks down with few emissions.
Methane is a gas that doesn’t last long but is very good at keeping heat in. It’s responsible for about a third of the rise in global temperature since the pre-industrial era, and nearly 45% of the warming happening right now. Nearly a third of all man-made emissions come from livestock. This is because of their burps, how they deal with manure, and how they grow feed crops.
In recent years, scientists have been warning about how much industrial farming contributes to global warming. As a result, agribusinesses like dairy have turned to unproven solutions like carbon offset markets and feed additives to reduce the amount of methane cows burp up instead of fixing the main problem, which is factory farming large herds.
Falling profits are one reason why dairy farms are merging.
Farmers have had trouble making a profit because production costs have gone up faster than milk prices, which were a little bit lower in 2021 than they were in 2000. This is partly because the US has made a big change in its dairy policy. Instead of keeping prices stable by guaranteeing a minimum price and buying and storing extra milk that would then be given away or sold, the policy now encourages production and grows export markets.
The change in policy, which included promoting dairy products in developing countries, helped the US become one of the biggest dairy exporters in the world. As exports went up, so did price swings, and the US kept milk prices low to stay competitive.
“This made money for agribusinesses and left farmers at the mercy of unstable international markets… “It is clear that policies that focus on exports have not helped the average US dairy farmer,” says the FWW report.
The dairy industry, which includes farmers, manufacturers, and cooperatives, as well as individuals and political action committees (PACs), gave $5.1 million to federal candidates in the 2020 election cycle, according to Open Secrets, a watchdog for transparency. In the same year, the industry spent $6.9 million to lobby hard in Washington to keep corporate subsidies and other benefits from the farm bill.
“The get big or get out message from our political and business leaders has come true,” said Sarah Lloyd, a dairy farmer in Wisconsin who helps run her family’s midsize farm with 450 cows. “Allowing this concentration has killed small and medium farms and crushed rural communities across the US.” “Farms that have been around for a hundred years can no longer keep their heads above water because of this boom-and-bust system, which makes it easier for farms to merge… It’s a never-ending cycle.”
In the last 20 years, farmers have killed themselves and the number of people living in rural areas has gone down because of their debts and bankruptcies. Lloyd said, “We can’t solve this problem by exporting or consuming more. Instead, we need policies that better manage supplies to match actual demand, so that dairy farming can once again be a good way to make a living.”
But dairy farmers have to pay for corporate plans that hurt their own interests. FWW thinks that between 2005 and 2018, dairy farmers paid about $4 billion into the Dairy Checkoff programme. This is a mandatory programme that pays for campaigns to promote US milk, butter, and creamers to consumers and fast food companies. These campaigns mostly help mega-dairies.
At the state level, at least $75 million in New York taxpayer money has gone to a few corporations and cooperatives over the last 20 years, with the promise of a few thousand jobs. However, some of those jobs were lost quickly when dairy plants shut down.
A spokesperson for the USDEC, which is mostly funded by the federal checkoff programme and the USDA, said that its main goal was to increase exports “on behalf of dairy farmers of all sizes across the country and because export sales help boost farm-level milk prices.” The current federal safety net for dairy is an insurance system that helps farmers deal with the effects of fluctuating prices.
“The sector is proud of its commitment to sustainability,” said a spokesperson in a statement. “It is working toward its 2050 goals of net zero emissions and better water management.”
Agriculture secretary Tom Vilsack was named CEO of USDEC after leaving the Obama administration, where he reportedly made more than $900,000 in 2020, which is more than 3,000 times the average farm income. Since he went back to work for the USDA under Biden, Vilsack has kept boosting US agricultural exports as a top priority.
A spokesperson for the USDA said that under the Biden-Harris administration, it had put in place a variety of new economic and technical support for small and mid-sized farms, including organic dairies, which make up 2% of milk production. The USDA was also working to create more competitive markets and strengthen local and regional food systems. “Together, these steps will help make sure that small and medium-sized producers have more, newer, and better ways to make money so they can improve their bottom line, get a fair price for their products, and fight against consolidation.”
