Tumultuous dairy industry contributes to tough choices
EVERETT, PA. (AP) - Sunrise Farm is a small dairy farm of 115 cows nestled in the rolling grass hills of Everett, parallel to Clear Ridge Road.
It has been in Stephen Bennett Sr.'s family for nearly a century, ever since his grandfather purchased the land in 1920.
But lower milk prices and the accumulated debt are pushing Bennett to sell the family-owned business, which will begin July 20 with an auction to sell farm equipment. After the auction, Bennett will start selling his cows.
"The sad part about it is that there are going to be a lot of family farms, small farms, exit the business," Bennett said. "And it's going to be like how the rest of the world operates: large corporates.
"Any business will have its ups and downs. And we've always had up-and-down cycles, but this last one has lasted too long," he added. "It's just been too long, and financially, a lot of people just can't cope with it."
Bennett said he needs $19 to $20 per 100 pounds of milk just to break even. He said he is currently making about $14 per 100 pounds of milk because of oversupply. While there has been a decline in milk demand, the costs of production per cow has increased, he added.
"In this line of work, we're in a business where somebody else tells you what they are going to give you for what you do," Bennett said, commenting on how co-ops set milk prices. "It's not like you can set a price. It kind of makes it tough."
Industry struggles, proposed solutions
The Pennsylvania Department of Agriculture and other dairy industry advocates launched a campaign May 18 at Martin's Foods along Logan Boulevard in an effort to address the struggles of dairy farmers.
The "Choose PA Dairy: Goodness that Matters" campaign aims to support the industry and educate consumers on finding and purchasing locally produced milk. Local milk products will be labeled with a PA Preferred logo or the plant code 42 on their packaging near the lids.
"In this business of food, there is both a person on the production side and a person on the consumption side," state Agriculture Secretary Russell Redding said.
"There's a human on both sides of this transaction. We make a connection between purchasing decisions and our local communities," Redding said. "We make a connection between dairy farms and good nutrition. We also make a connection between the health of our bodies and the health of our communities."
Redding told Congress in February that when milk prices are down, farmers add cows to try to make up for lost revenue but collectively worsen the imbalance of milk supply that reduced prices in the first place.
Data from the U.S. Department of Agriculture National Agricultural Statistics Service show a 13 percent increase in milk production in the United States from 2008-17, jumping from 190 billion pounds in 2008 to more than 215 billion pounds in 2017.
The NASS data also illustrate a decrease in consumption of fluid milk nationwide from an average of 179 pounds per person in 2008 to an average of 154 pounds in 2016.
Larry Miller, service manager at Fisher and Thompson dairy farm supplier, cited multiple reasons for the dairy industry's decline, including a lower consumer demand, marketing from other beverages, competition from milk alternatives, limits of milk supply in schools and reduced milk exports.
Gov. Tom Wolf and his administration are trying to attract new processors to the state, surveying county economic development organizations to determine suitable sites for dairy processing, petitioning the state Milk Marketing Board to seek reforms and collaborating with stakeholders to produce a dairy development plan, according to a press statement.
While many farmers are in a difficult financial situation, Redding said he is more optimistic about the industry, noting that indicators are improving.
As tips to dairy farmers still in the industry, Redding suggested farmers have conversations with their farm lenders, ensure all farm operations and services are sufficient, take advantage of available resources and add other enterprises and diversification to their businesses.
Renting property out, diversification
Some farmers still in the industry opted for diversification and for renting their properties out.
David Smith, who owns a farm in Martinsburg, sold his milking cows in December 2016. He now rents his property to Phil Kulp, a dairy farmer down the road from him, and raises cows for him. Smith also works part time at Central Hydraulics.
He said he received a sign from God nearly two years ago that it was time for him to get out, noting indicators that the industry was not going to bounce back.
"I love what I did," Smith said. "But God knew what my next steps would be," adding he was fortunate to have made an easy transition and received support from his accountant and staff.
"I realize everything I have is God's," Smith continued. "I took it from the perspective that this is God's farm, and I will do what he wants me to do."
Smith's father, George, bought the homestead in March 1962. Smith began farming from the time he could "pick up buckets" and took ownership of the farm in 1998. He had a total of 600 milking cows before selling them.
"Dairy farmers are price takers, not price makers," Smith said. "A farm of about 100, maybe 150, can find a niche in the dairy industry and make it through some of these downward turns. And, of course, a really large dairy farm, meaning 1,000 plus, can work through it because of its economy of scale."
Smith said there needs to be a balance of intervention, regulations and non-interference to help fix issues within the industry and also recommended that dairy farmers have side businesses, whether that's shed-making or raising chickens.
David Rice, owner of the Clover Creek Cheese Cellar in Williamsburg, said he began diversification efforts 13 years ago, when his dairy farm started selling cheese. He and his family also produce raw milk and grass-fed beef, selling their products to health food stores and at farmers markets and stands.
He cut ties with his co-op in November 2017, realizing it made more economical sense for him to sell his products himself instead of through a co-op. In a given week, the farm produces about 200 gallons of raw milk and about 1,000 pounds of cheese.
"If it's been a family farm for generations, it's really hard to give up that heritage," Rice said. "Even though my family has farmed for many, many years, it's been in different places. So that's made it a little easier. But there are farms around here that have been in the same family for 200-300 years."
Rice has 55 milking cows, 54 calves and 32 yearlings on his 135-acres, which the family bought in 1990. All of his products come from grass-fed cows.
"We went this cheese route because we were hoping to keep it a small family farm and provide opportunities for any of our children to come along and be part of the family farm. I think there are a lot of customers that want that," he said.
"I think that, as farms get too big, I think there may be backlash," Rice added. "I think that's what the industry needs to be careful of. They don't become so big that they lose touch with what people want."
Family over farm
Bennett was only 6 years old when he started helping out on the farm. The now 55-year-old farmer wore a portable defibrillator for three months due to heart issues while managing the farm's daily operations and needs annual health checkups.
The daily stress and financial instability of managing a dairy farm are too much of a distress to his health and to his family.
Before his death about seven years ago, Bennett's father reportedly told his son to get rid of the farm if it became too burdensome.
"Which is more important? Your family, your life or the farm?" Bennett asked rhetorically.
"I think if things would've been better — if things were good and the business was good and you had to sell because of health reasons or something — it would really be tough to give it up," Bennett said. "But in the last two or three years, it's been so tough trying to keep it going that you don't look at it the same way.
"It's just been so tough in the last couple years that you get to a point where you need away from it. You just need to move on," he added.
As Bennett prepares to leave the dairy industry, he is unsure of what will happen next. He said he is thinking about getting into commercial truck driving or school bus driving and is searching for other full-time job opportunities.
"I just take one day at a time and let the good Lord lead me where he wants to," he said as he stood up to go prepare feed for his cows.