the north face upland boost production but face an oversupplied market
Fans on the south end of Bob Nichols’barn blowair through the north end, creating a pleasant breeze for his 120 cow dairy herd.While the airflow cools two rows of Holsteins, Jerseys and Guernseys at his County dairy farm on an early July morning, there’s another far more critical reason his herd benefits from this form of low tech air conditioning.There’s nary a fly in sight.The scene is in stark contrast to just 10 years ago, when the barn was teeming with the nasty bugs constantly pestering the herd.The adage is true: A contented is a happy cow. A happy cow will reward the farmer with increased milk production.On this verdant Tuscarora Townshiphilltop, the era of modern dairy farming is on display, but so are the challenges.Across New York and much of the nation, dairy farmers are struggling to survive under pressure of increasing costs and dramatically lower prices for the commodity.In New York alone, the dairy industryis an estimated $2.3billion a year business. For the nation, the dairy industry accounts fornearly $36 billion in sales annually. If it were a single company, the dairy industry would rank 84th on the Fortune 500 list, about the same size as Allstate.These new business realities,in many instances, are pushing aside the small family farmer in favor of larger operations taking advantage of economies of scale. If not checked, the dairy industry of tomorrow will barely resemble the operations that goback generations.Even today, Nichols’ dairy farm is far different from the farm operated by his ancestors.Today’s dairy farms combine the traditional gut instinct of the farmer with technology advancements everything from enhanced feed formulations, scientific breeding methods and almost constant monitoring of herd health.The end game: Raise the milk yield from each cow. And the dairy industry has become far too productive, with supply often outstripping demand.”Production per cow is on a straight line upward, and it is a line that increases faster than the rate of population,” said Andrew Novakovic, professor of agricultural economics at Cornell’s SC Johnson College of Business.Because of the oversupply, some milk is, literally, being dumped.”It’s a situation that’s deeply troubling to the dairy industry, because these guys work their butts off to make a high quality product, and to stick it into the manure pit is literally heartbreaking,” Novakovic said.Buy PhotoA milking machine is attached to a cow Wednesday at Nichols Dairy Farm in Addison, County. (Photo: Patrick Oehler / Staff Photo)Even with a 22 percent decline in New York dairy farms over the past 10 years, and a 3 percent drop in the number of cows, the state’s dairy farmers produce22 percent more milk,
according to the most recent figures compiled by New York’s Department of Agriculture and Markets.Those numbers are not unique to New York. Nationwide, more milk flows from cowsthan the market can absorb creating an oversupply that has sent milk prices plummeting.Buy PhotoDuring Norwich Dairy Days in June, the diary industry tried to rally support around its cause. (Photo: Jeff Platsky / Staff photo)For New York andWisconsin, which rank third and second, respectively, in total annual milk production, lower prices mean more dairy farmers are considering giving up their herds and closing. California is number one.In July, farmers were being paid $16.59 per hundredweight about 12 gallons of milk for the raw product. While that’shigher than the $15.20 in May, the average market price still is the lowest since 2009, when it dipped to about $14. One Pennsylvania farm organization puts the national average cost of production at nearly $22.Lower prices have a significant impact on the profitability of the typical farm. For instance, the average gross income for a dairy farmer when dairy prices were at their peak in 2014 about $25 per hundredweight was slightly above $700,000. In 2016, that income dropped by about 20 percent and even more on an inflation adjusted basis to $545,000.”There’s a lot of milk on the market,” said David Fisher, president of the New York State Farm Bureau, who also runs a 1,200 herd farm in St. Lawrence County.For upstate dairy farmers, the impact is serious.Within the 10 regions of New York, the Southern Tier has the largest number of farms, with more than 6,600, according to a report from the state comptroller. However, the Finger Lakes region has the largest amount of farmland and is home to two of the most productive farming counties, and , with nearly 1.5 million acres.Dairy farming represents the largest agricultural business in the state, accounting for about $2.4 billion of the estimated $5.4 billion in farming revenues.If current trends hold, however, while revenues stagnate or grow modestly depending on federal milk prices, the number of farms will continue to decline as the rush toward technology and larger herds to take advantage of economies of scale continue toturn the small,
family owned farm into an anachronism.