Plummeting prices threaten Pennsylvania dairy farmers

Published 12:33 pm Thursday, July 14, 2016

MIFFLIN BURG, Penn. — Milk prices have fallen by more than 40 percent since 2014, threatening the livelihood of central Pennsylvania dairy farmers.

“We’re losing money,” said Leroy Troester Sr., of Troester Dairy, last week. “Am I in the wrong business?”

US Milk Farm Price Received is at a current level of $14.50 per hundred weight — how milk is priced — down from $15 last month. This represents a monthly annualized growth rate of -40 percent, compared to a long term average annualized growth rate of 1.39 percent. Two years ago, in June, milk prices topped $25.

“That was a fair price,” Troester admitted. “But it still doesn’t take into account cost of production, which includes the cost of feed, fertilizer, equipment, and labor, to name just a few things.” Another is the Free Trade agreement, which is allowing agricultural products to be imported into the U.S. from places like China, increasing the supply, lessening the demand. 

China once helped drive global dairy demand but its stockpiling of powdered milk has sent prices plunging and has left farmers facing risks.

Troester hosted a meeting of 20 central Pennsylvania dairy farmers, and Union County Commissioner Preston Boop, at his farm to meet with Arden Tewksbury, manager, Progressive-Agriculture group, whose mission is to influence Congress to pass legislation that says “all milk produced in the U.S. will be priced on the national average cost of producing milk on dairy farms.”

“You tell me,” he said to the group gathered on Troester’s porch, “how many dairy farmers can stay in business running $14 milk?”

Under this price pressure, farmers are not able to pay bills, buy supplies or purchase equipment and feed, Troester added.

Acknowledging that the only way to raise that price is to put pressure on legislators, Tewksbury put together a letter, signed by 13 Central Pennsylvania county commissioners calling for a meeting with their Congressmen.

“We are kindly asking that you make youself available for roundtable meeting so that we may communicate the issues and present our case on behalf of our struggling farmers,” Tewksbury said in the letter. “Farmers desperately need a milk price that will sustain their business.”

Tewksbury said he has yet to have a response back from those in Congress he contacted.

The group he represents is pushing Senate Bill 1640, the Federal Milk Marketing Improvement Act of 2011 — legislation that has been stuck in Congress.

“Do you think the U.S. Congress has been fair to you?” he asked the gathered group.

“Of course not,” he said, answering his own question. “It’s high time that all dairy farmers get behind the Act, which could play a major role in stabilizing a fair price to all dairy farmers.”

But last Friday, U.S. Representative Lou Barletta responded, saying “As a member of the Dairy Caucus in the House, I am always very concerned about the health and viability of the milk industry and our dairy farmers.”

Without question, our milk supply is vital to food security, Barletta said, “which to me is an important part of our national security. That’s why I have been very concerned about recent trade deals and the need to make sure our markets are not flooded with foreign products at the expense of our own hard working farmers. In the most recent farm bill, we implemented a new program that provides a type of insurance to dairy farmers if their margins dip below certain levels. While I continue to receive input from farmers on the program, it is important to understand that any new policy may not be perfect in its first use in real practice. I know that the House Agriculture Committee is already at work on the next farm bill, and I look forward to being able to support policies that are good for our dairy farmers and good for our food security.”

Troester and Tewksbury said they were not happy with the just-passed farm bill, which took away price supports.

U.S. Representative Tom Marino, last Friday, noted that “For the past few years, dairy farmers in Pennsylvania and around the United States have been hurting due to the low price of milk, growing cost of feed and overall slow rate of growth in the Obama economy. Pennsylvania is ranked fifth in total milk production and has the second largest number of dairy farms nationally. I have met with numerous dairy farmers all across my district and have shared their concerns with my colleagues in Congress. We will continue to work towards common sense dairy policies that provide a reasonable backstop to help dairy producers in times when milk prices are at a low.”

Dandes is a writer at The Sunbury, Penn. Daily Item.