Dairy pricing system is broken'

Vermont dairy farmers are facing their greatest crisis yet.

The price of milk has dropped to $13.81 per 100 weight from $20 cwt just a year ago.

As the price of milk fell to its 2009 low last week, a triple-witching hour of sorts has taken place: The prices of fuel, feed and bedding sawdust used by farmers has hit the barn roof.

Now dairy farmers find themselves staring into an abyss of uncertain depth.

Since 2004, 250 dairy farms have closed in Vermont. Since January of this year, 32 farms have closed. Only 1,046 farms remain in business today and the figure shrinks each month.

According to state data, dairy represents 70 percent of Vermont's agricultural economy-over $2 billion. The state's farm business also generates over $68 million in local and state taxes with 96 percent of farm supplies-from feed to slop buckets-are purchased locally.

With ongoing farm closings , the crisis will expand affecting feed dealers, farm vehicle and equipment suppliers, processors, farm insurers and creditors and other businesses.

"The dairy pricing system in the United States is broken. It is antiquated, dating back to the 1930s when markets were not as complex as they are today, and simply does not work as originally intended. And although there has always been some volatility and market fluctuation in dairy pricing, the swings are becoming more dramatic and occur more often," according to Vermont Secretary of Agriculture Roger Allbee. "This most recent downturn in prices is the worst yet. Cost of production is almost twice what farmers are getting paid for fluid milk and it's predicted that these low prices will be in effect for a longer period than originally thought."

Dairy farmers Bob and Beth Kennett of Rochester are the human face of Vermont's current dairy crisis.

The Kennetts started their Liberty Hill Dairy Farm in the 1970s. According to state agricultural records, 50 farms operated in Rochester area back in 1960.

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