October 20, 2021

Milk market squeezed

Dairy farmers, hit hard by virus, dumping product

S.N. Briere/ staff reporter

Stewart Young, an owner of East River Dairy, watches with Alnye truck driver Mark Ellis as milk is dumped into a manure pit on the farm’s property. The cooperative Dairy Farmers of America has been asking some farmers to dump milk because there is not a great enough market for everything being produced by farms.

Stewart Young of East River Dairy in Homer drove up the muddy path Tuesday, parked his truck and stepped out to see the Alnye truck with a tub connected to the back.

A few minutes later, white liquid started flowing into the manure pit — it was the farm’s milk, which the truck had just picked up only moments earlier.

The farm was told by its cooperative, Dairy Farmers of America, that it would need to dump some of its milk in its manure pit if it was able to — not something co-owner Young thought he’d have to do this year.

“It’s crying time,” he said. “It’s a shame I would have to do that.”

The cooperative, which includes about 13,000 farms across the country, said the coronavirus has dried up the marketplace for milk.

But East River Dairy isn’t the only farm in Cortland County, the state or the nation struggling to cope with the fallout from the coronavirus outbreak in the U.S.

“It’s affecting all dairy farmers, whether you’re a DFA member or not,” said Paul Fouts, who owns Fouts Farm on Route 222 in Groton.

Fouts said the issues facing the milk industry is that “there’s no home for it” and the milk prices are crashing.

“When the coronavirus hit, they shut down the schools and we took a big bit,” Young said. “A lot of milk goes into the schools.”

In fact, schools are the biggest buyers of fluid milk, Fouts said.

Many restaurants also shut down and the ones that didn’t aren’t buying as much dairy and cheese as they were before.

“About 45% or so of our milk produced in the U.S ends up as cheese or butter in the restaurants,” Fouts said. “Those markets are pretty much dried up. The individual households are not making up for that.”

On top of that, the milk prices are also now dropping. Fouts said before the virus hit milk was around $18 per hundredweight, or 100 pounds. The Futures Market, which gives an indication of how the markets are doing, suggests the price will go down $5, to $13 per hundredweight, well below the cost of production.

However, Fouts said he won’t know what prices are like until the check comes.

“Milk produced in March, I don’t get paid for it until April,” Fouts said.

“It was originally supposed to be the first year in four or five years that milk prices were going to be good, that’s not going to be true now,” Young said.

S.N. Briere/ staff reporter

Young points out how much milk flow one cow is producing during one of its three milkings of the day. The cow produced about 14.5 gallons of milk.

Fouts said part of the problem stems from distributors and milk plants having to practice social distancing, “so that’s slowing things down,” Fouts said.

So, lots of milk is being produced, but not all of it can be packaged. Some of the plants are turning to producing powdered milk, but not all, Fouts said.

“The plants that can run are taking all that they can and if the co-op can’t find a home for it, we have to dump it,” he said. “The actual milk price we’re getting has probably dropped at least $5 per hundredweight.”

But the farms in the cooperative are still getting paid.

“We do get paid, but it will be less because the co-op doesn’t get paid and they need to break even on it,” Young said. However, it likely won’t be enough to keep farms in business.

“If this goes on more than a month or two, we’re all going to be out of business — there won’t be any of us left,” Fouts said. “We’ve been barely breaking even for the last four or five years because of milk prices, and now this.”

Fouts said he makes around 50,000 pounds of milk a day or about 500 hundredweight. If it’s gone down $5 per hundredweight, Fouts said he would lose about $2,500 a day.

“That’s a lot of money,” he said.

However, the organic milk industry hasn’t been hit, yet, said Kathy Arnold, who owns Twin Oaks Dairy Farm in Truxton. She’s not expecting the organic industry to take a hit either.

“I don’t expect there will be an issue on the organic side because most organic milk goes through regular consumer grocery stores,” she said. “On the conventional side for milk marketing, much more of that goes into food service and institutions, so that is where there is more of the crunch.”

Arnold is a member of Upstate Niagara Cooperative, which collects and distributes both organic and conventional milk. That cooperative sets a pay rate for the whole year, so she’s not facing “an up and down cycle,” like many other farmers.