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March 13, 2010

Farmers may break even after dismal years

By Ryan Smith



In early 2009, when many of the region’s dairy farmers and farming officials gathered in Townville to talk shop about the state of Pennsylvania’s milk-making industry, one thing was clear. For those trying to make money out of milk, it was going to be a rough year.

The industry hit a low that, by most accounts, had been among the worst ever seen, with raw milk prices for dairy farmers dropping by almost 50 percent. Economists estimated that meant dairy farmers could expect to lose about $1,000 per cow in terms of income for the year.

“That sounds about right,”

Cochranton-area dairy farmer Brooks Rynd said when he heard that figure late last year.

Prices starting making an upward swing again in the later months of 2009, but not as quickly as they’d bottomed out, and not before dairy farmers like Rynd had to contend with 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.

The U.S. Department of Agriculture is now forecasting raw milk prices for farmers to be back up to between $14.20 and $14.80 per hundredweight this year, according to current state Center for Dairy Excellence reports.

But when compared to the cost of production, that still means “we’re going on two years of farmers producing milk and not being able to cover their costs,” David Dowler of Penn State University’s Crawford County Cooperative Extension said recently.

Dairy groups representing farmers here and across the country have continued putting forth efforts to address the issue and effectively overhaul the pricing system established by the federal government.

The Pennsylvania Farm Bureau late last year urged the Pennsylvania Milk Marketing Board to increase the per-hundredweight price given to farmers, 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.

“I think (prices are) 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 said.

Farmers have also expressed interest 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, Rynd — whose family has been farming in Crawford County since the late 1700s — has said a pricing system needs to be established that “allows small family farms to remain small family farms.”



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

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