Corporate consolidation and low commodity prices are posing an existential threat to small, family farms, farmers warned at an event hosted by the Wisconsin Farmers Union in Madison last week. Several producers, from small organic growers to commodity milk farmers, shared stories about how tough farming has become.
“We are on a treadmill right now,” said Sarah Lloyd, a dairy farmer and former Congressional candidate from Columbia County, Wisconsin. “We’re running faster and faster just trying to make that little margin to keep our businesses afloat.”
The event Thursday preceded a day-long roundtable at the University of Madison law school on enforcement of antitrust law in the agriculture sector, hosted by the American Antitrust Institute.
The event opened with remarks from National Farmers Union president Roger Johnson, who discussed the Farmers Union’s involvement in pushing for national antitrust law and enforcement at the turn of the 20th century. “Let’s just hope that every 100 years we decide to do something about this,” Johnson said, referencing what many farmers see as a chronic lack of antitrust investigation into the largest agriculture companies.
Farmers described a consolidated economy in which lower prices from buyers and rising prices from suppliers result in a “squeeze from both ends,” said Lloyd.
Wisconsin farmer Jim Goodman said the problem extends into organic dairy as well, once hailed as a margin-lifter for conventional dairy farmers looking for a way to make ends meet. Goodman’s family received good prices for their organic milk for a while, he says, but in the past several years prices have dropped as much as 40 percent. “Ten years from now, there won’t be any small organic farms left,” he predicted.
The number of dairy farms in Wisconsin has dropped dramatically over the past decade, with half as many dairy farms in the state today as in 2003. Nearly 700 farms shuttered this year alone. Goodman sold his dairy cows in June.
Other farmers spoke about lower-profile sectors of the agricultural economy that have also consolidated, leaving them with fewer places to sell their products. Oren Jakobson, a Wisconsin farmer and former board chair of a retail supermarket cooperative, discussed his co-op’s difficulties in attempting to diversify their buying beyond United Natural Foods Inc., the biggest organic foods distributor and Whole Foods’ exclusive supplier. Many in the grocery retail industry are watching UNFI to see if the company shifts its practices now that Whole Foods is owned by Amazon. Jakobson described his co-op’s painstaking attempts to balance buying direct from producers or smaller distributors, while also needing to meet UNFI’s required minimum order threshold to retain any competitive edge in a crowded retail marketplace.
Even the farm equipment sector has shrunk, said, farmers Craig Dunham and Kevin Mahalko. The roll-up of machinery dealerships has reduced options and raised prices for farmers seeking tractors and other equipment. “We used to have about four or five John Deere dealers within an hour, and now we have to drive an hour to get to one independent,” Dunham said. “One dealership owns all the other ones around us. Wherever you go it’s the same price, it’s the same labor rates. They basically have controlled everything from the top down.”
“We see less and less of the scale of equipment that’s even relevant to small farms,” added Mahalko.
John Deere has recently come under scrutiny for restricting farmers’ ability to repair their own equipment. Deere controls about 30 percent of the tractor market.
“We need enforcement in antitrust,” Lloyd said. The National Farmers Union and its regional chapters have advocated for several policy approaches to fight farm consolidation, including recent legislation from New Jersey Sen. Cory Booker and Wisconsin Rep. Mark Pocan to institute a temporary moratorium on agricultural mergers.