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November 4, 2009

Sour milk: Dairy farmers facing major losses in prices

By Ryan Smith

MEADVILLE TRIBUNE

Last February, the Rynd family was putting the finishing touches on a new, state-of-the-art milk house that has nearly doubled the capacity of their Cochranton-area dairy farming operation.

That was also right around the same time the industry the family’s been part of locally since 1791 hit a low that, by most accounts, has been the worst ever seen.

“We started building when the prices were good. By the time we were finished, the prices had bottomed out,” Brooks Rynd said recently. “It was kind of a shock,” he added, to see just how low the bottom was.

While Rynd said there’s been some small signs of improvement in recent months, raw milk prices for dairy farmers dropped almost 50 percent earlier this year, according to industry experts. Farmers like the Rynds have been getting paid only about $10 per hundredweight (a unit equal to 100 pounds) for their milk at a time when the average cost of production for that same amount is around $14 or $15.

As it stands, economists are “estimating dairy farmers are going to lose about $1,000 a cow this year,” said David Dowler of Penn State University’s Crawford County Cooperative Extension.

“That sounds about right,” said Rynd, who would see the family farm take in a total of about $180,000 less this year if that figure stands correct, based on his approximately 180-head herd.

Prices “started to come up the last couple of months,” he said, “but I think it’s going to have to come up quite a bit — and stay up — to get all the bills paid and keep everyone’s heads above the water.”

Rynd was quick to point out that while he feels his family’s farm has been treated fairly working as a supplier to a relatively small-sized, Pennsylvania cheese company (Evans City-based Marburger Cheese), many other raw milk producers who supply large corporations feel they’re being gouged.

Dairy groups representing farmers here and across the country have put forth efforts to address that issue and effectively overhaul the pricing system established by the federal government. The Pennsylvania Farm Bureau reportedly recently urged the Pennsylvania Milk Marketing Board to increase the per-hundredweight price given to farmers by 50 cents for the rest of the year, while the Pennsylvania Dairy Managers issued a list of recommendations for an overhaul that the association said would help small farms like the Rynds’ and others remain lucrative businesses.

To that end, Rynd said he would be specifically interested in seeing more research go into quota-based pricing systems, such as the one set up in Canada, that could possibly provide small dairy farmers here better tools for managing the types of supply-and-demand issues that currently cause massive fluctuations in the amounts they are paid for their raw products. One way or another, he said a system needs to be established that “allows small family farms to remain small, family farms.”

As it the stands at the Rynd farm, it’s three milkings a day — just like always. “The dairy industry is in bad shape, that’s for sure,” Rynd said. “But we’re just happy to keep farming and doing what we’re doing.

“Let’s hope for the best.”



Ryan Smith can be reached at 724-6370 or by e-mail at rsmith@meadvilletribune.com.



By the numbers

n Dairy production makes up 45 percent of Pennsylvania’s agriculture business, which is the state’s largest industry.

n Pennsylvania dairy farms produce about 11 billion pounds of milk annually.

n The dairy industry represents 40,000 jobs statewide, and is worth $4.2 billion to the state’s economy.

n As of 2006 — the latest year for which figures are available — there were roughly 13,000 dairy cows in Crawford County. A decade earlier, there were an estimated 19,000.

Source: Pennsylvania Center for Dairy Excellence

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