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State dairy industry dips below 1,000 farms

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Posted on July 7, 2011 |
By Andrea Suozzo



VERMONT — During the month of May, eight more dairy farms in Vermont shuttered their milking parlors, dropping the number from 1,001 to 993 — the first time in recent history that Vermont has had fewer than 1,000 dairy farms in the state.

The numbers, reported by the Vermont Agency of Agriculture, continue a downward trend in Vermont’s dairy industry. According to Bob Parsons, an agricultural economist with the University of Vermont Extension, the number of dairy herds in the state has decreased by a steady 2 to 4 percent since the 1960s.

Morrison Brothers in Leicester was among the eight farms to close in May. Keith and Steven Morrison auctioned off their 220 cows — 120 of them milking cows — on May 18, closing up their Leicester dairy farm. The brothers, 57 and 54, grew up dairy farming with their father and took over the family farm when their father retired 20 years ago.

To Keith, the decision to get out of the business was bittersweet, but for him it was more about getting a break from 35 years of full-time farming than about the pay. Despite the rock-bottom prices on the milk market over much of the past few years, the farm has always managed to make money.

“I just made up my mind this spring that I didn’t know if I wanted to milk cows through another spring,” he said. “It wasn’t really a financial decision. The biggest thing was wanting a break from being on call seven days a week, and wanting to spend a little more time with family.”

Morrison said this year is also a favorable time to sell. Milk prices are back up into the low $20 range per hundredweight, up from around $12 in 2009, so dairy farm assets are also more valuable.

Clark Hinsdale, president of the Vermont Farm Bureau, said some of the farmers sending their herds to auction now have been waiting since 2009 to leave the business.

“There were people who failed then, but you couldn’t get out. How are you going to get out if the asset value of your business is half of (what it was)?”

And Parsons said that, given the severity of the 2009 price downturns, Vermont farmers scraped by better than could have been expected.

“Frankly, I’m very surprised that we haven’t lost more farms since the price downturns,” said Parsons. “I think it’s really a tribute to the perseverance of the Vermont farmer. Their viewpoint is long-term, and they’re really trying to survive.”

BEYOND THE NUMBERS

Looking at dairy farm numbers can be deceptive when evaluating the overall health of the dairy industry.

Hinsdale said that while the drop below 1,000 farms looks significant, that number should be taken with a grain of salt.

“There’s no question about the fact that on the symbolic level, it’s sad,” he said. “But what I watch a little more closely is the output of the dairy industry.”

Parsons said that in terms of relative output, Vermont is pretty much the same as ever.

“Vermont is not producing much different on a national level than we did in 1970,” he said.

That’s because as dairy farms go out of business in Vermont and across the nation, herd sizes are increasing.

“We’re seeing fewer farms every year, but more cows per farm and more milk per cow,” said Parsons.

And while there are fewer farms actually milking cows, said Hinsdale, other businesses have grown up around dairy farming.

“A generation or two ago, most dairy farmers also raised their own calves and crops. Now there’s more specialization, where some people do calves, some do crops, some do milking cows.”

This specialization makes it easier for existing dairy farms to add more cows.

Still, the constant pressure to expand was one of the reasons that the Morrison brothers chose to leave the business. It was either get bigger and hire additional labor, stay smaller and find a niche market, or get out.

“My brother and I worked together pretty well, but I don’t know that we’d be good people managers,” said Kevin.

He added that he was heartened to see some newer, smaller farms that cater to niche markets buying his cows in May.

Parsons said as the milk production centers move west — California now produces most of the nation’s milk — Vermont’s dairy industry is splitting into two tiers, and commodity dairy producers are being joined by a growing number of small farms selling products like cheese, yogurt and raw milk.

And according to the Northeast Organic Farming Association of Vermont, there are now more than 200 certified organic dairy farms in the state.

These new structures, said Parsons, have allowed farms that can’t expand to instead boost profit by producing a product that sells for a higher price.

“We’re merging two structures in Vermont,” he said.

This is a welcome trend, said Vermont secretary of agriculture Chuck Ross.

“Our dairy community is diversifying,” he said, “and a diverse economy is typically a stronger economy.”

He added that while cow dairies are under 1,000, a count of all dairy farms in the state must also include sheep and goat operations, which yields a total of 1,026 dairy farms.

Add to this a growing number of beef, vegetable and grain farms, and Ross said agriculture as a whole has a bright future in the state.

“The profile of agriculture is changing. I think that’s a good thing. I think we’re going to see an increase in different kinds of dairy, and an increasing presence of non-dairy agriculture as well.”

Ross said his priority is building the name of Vermont agricultural products, including fluid milk, yogurt and cheese, across the state and region. While he said there will always be demand for fluid milk on the regional commodity market, he’s also focused on the opportunities that will allow Vermont farmers to differentiate their milk and boost prices.

But even commodity milk prices are high now, and Parsons said he expects dairy farm numbers to become more stable.

“I think we’ll see a slowing of the number of farms going out of business,” he said. “Some formulas will tell you that in 15 years we won’t have any dairy farms, but it’s not going to be that linear.”

Reporter Andrea Suozzo is at andreas@addisonindependent.com.

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