At a firehouse in Lairdsville, Pennsylvania, on Tuesday, farmers gathered for an emergency hearing on the current crisis in the dairy industry. They testified about the impact of falling milk prices, discussed possible solutions, and expressed anger at federal policymakers’ spotty record of supporting dairy farmers at a time when falling milk prices and overproduction continue to drive dairy farms across the country out of business.
The hearing was called by Farm Women United, a new women-led farm advocacy group, and was timed to coincide with a visit from leaders of the National Family Farm Coalition (NFFC), who have been touring farm country for several months collecting testimony on the current state of the farm economy.
Niaz Dorry, executive director of the NFFC and also coordinating director of the Northwest Atlantic Marine Alliance, said that throughout the tour, she has heard farmers and fishermen describe similar challenges. “As a society, we’ve decided that those who put food on our table are not worth having their cost of operations met,” she said. Processors increasingly decide “where their product goes, how it’s treated, who gets to eat it, how far it travels,” she said. And those off-farm decision makers “are setting their prices for them, and sometimes very arbitrarily telling them, ‘We’re not going to buy your stuff anymore.’ ”
About 30 dairy farmers attended the hearing, where corporate control and far-away decision makers were common complaints. A few staffers from local politicians’ offices also attended briefly.
One of the farmers’ biggest targets was dairy cooperatives, which are tasked with marketing farmers’ milk to processors. (Some also have their own processing operations.) Just a few cooperatives — Land O’Lakes and Dairy Farmers of America (DFA) are the largest — control the vast majority of milk marketing in many dairy states. In several recent incidents, those cooperatives and their partners have dropped farmers from their pickup routes, leaving those producers with no place to sell their milk.
In addition to this volatility, farmers have also argued that co-ops deduct opaque charges from their milk checks, cutting into their margins. “I have seven items coming out of my milk check that I don’t get to see,” said Judy Oliver, a Pennsylvania dairy farmer, including fees for hauling, fuel, and advertising. She encouraged farmers to push back against their cooperatives. “We have the choice — we don’t need to stay with DFA,” she said.
But for many farmers, DFA is the only viable marketing option. The cooperative controls about 30 percent of all milk sales nationally, and a much higher percentage in some regions. Despite hundreds of dairy farms shuttering each year, many smaller cooperatives are at full capacity and unable to accept new members. So being dropped from DFA or another major cooperative can be the final straw for a struggling farm.
At the hearing, farmers called for a federal investigation into the behavior of dairy cooperatives and processors. Farmers have been agitating for better federal oversight of the dairy industry for decades. In 2004, the Department of Justice did launch an investigation into DFA and its processing partner Dean Foods after farmers alleged that the companies were violating antitrust law, but the investigation was halted in 2006. In 2010, Christine Varney, then-assistant attorney general in the DOJ’s antitrust division, held a meeting with dairy farmers in New York about allegations of anti-competitive conduct in the industry, but little change resulted.
“In order for farmers to take back co-ops … we need those federal investigations,” said Brenda Cochran, president of Farm Women United. Others echoed the sentiment. “[The cooperatives] have such control. … [N]o matter how high the [milk] price is, if the government doesn’t do its job and enforce the laws,” farmers are still at a disadvantage, said Jonathan Haar, a New York dairy farmer who is involved in litigation against DFA.
Several policy solutions were discussed during the hearing, including reintroducing whole milk into the school lunch program, coming up with federal supply management policies that would limit overproduction, setting a higher floor price for fluid milk, and breaking up the biggest dairy cooperatives to reintroduce competition into the marketing and processing sectors.
Farmers also spoke out against alternative non-dairy — like almond and soy — milks. The dairy industry has long called on federal regulators to prohibit non-dairy beverages from labeling their products as “milk.” Scott Gottlieb, the head of the Food and Drug Administration, recently announced that the agency is looking into whether it has appropriately upheld its “standard of identity” for milk, perhaps signaling a crackdown on nut-based beverages.
But the most common refrain was articulated by Arden Tewksbury, general manager of the Progressive Agriculture Organization: “Give these farmers a fair price for their milk.” Milk pricing is determined in part by the Department of Agriculture, though prices vary by type of milk product and by region. The price of milk currently hovers around $14 to $15 per hundredweight, though some farmers report production costs closer to $22 per hundredweight.
The recent drop in milk prices has exacerbated a decades-long decline in the number of dairy farms in the country. Over the past 10 years, more than 17,000 dairies have shuttered, leaving the U.S. with some 40,000 dairy farms. In 1950, there were about 3.5 million farms with milking cows.