AUGUSTA — Faced with low milk prices and high feed costs, Maine dairy farms have received a record $32 million since 2015 from a “safety net” program credited with helping them avoid the more drastic farm losses seen elsewhere in New England.
But the number of dairy farms in Maine has still decreased during that time despite receiving money to reduce the difference between the cost of producing milk and what they get paid for it.
Maine farmers said a regional approach to federal dairy policy – combined with more equitable distribution of what consumers pay for milk – will be needed to protect one of Maine’s largest agricultural industries.
Those were some of the messages relayed Thursday to Brad Pfaff, deputy administrator for farm programs at the U.S. Department of Agriculture’s Farm Service Agency. Pfaff met with farmers and dairy industry representatives at the headquarters of the Maine Farm Bureau during a round-table discussion organized by U.S. Rep. Chellie Pingree, D-District 1, to gather feedback ahead of congressional reauthorization of the Farm Bill.
“Some of the policies that are challenging people today came out of the last Farm Bill,” Pingree said, referring to the multi-year federal legislation that establishes federal agriculture policy. “We want a chance to have our input into what the new Farm Bill looks like and how to write something that sustains our dairy farmers, that doesn’t make it impossible for you to compete but helps you get through the difficult times.”
Prices paid to dairy farmers nationwide for liquid milk have fallen by about 40 percent since 2014, driven down by a glut of product, changing export markets and the use of more milk for cheese, yogurt and other products. Last summer’s drought also drove up the cost of feed. As a result, the price stabilization program run by the Maine Milk Commission has paid out roughly $32 million since 2015 to help farmers cover the difference between their production costs and the amount they receive.
Maine’s dairy industry has an estimated economic impact of roughly $570 million, a figure that has been holding relatively steady for several years, according to the Maine Dairy Industry Association.
Over the past three years, the number of dairy farms in Maine has fallen from roughly 300 to just under 250. Yet Maine’s milk production increased to 624 million pounds this year – the most since 2003 – as the remaining farms added cows. While the decline in dairy farms is a concern, industry representatives said the losses would likely have been even larger without the price stabilization program.
New Hampshire, which does not have a similar program, lost 16 percent of its dairy farms during the first eight months of 2016, that state’s agriculture commissioner said earlier this year. New Hampshire now has roughly 100 dairy farms.
“Maine has seen the wisdom of trying to keep our open space and our dairy farms in business,” said Tim Drake, executive director of the Maine Milk Commission, which is funded with both General Fund revenues and money from the industry. “We are healthier than our neighboring states in New England.”
Despite milk’s simple and wholesome appearance, the process of deciding how much consumers pay and farmers receive is anything but simple. Federal dairy pricing policy is so complicated that many of those in attendance on Thursday acknowledged – only half jokingly – that they don’t understand it. And dairy policy-making is often rife with regional political tensions pitting states where smaller-scale dairy farms are more common, such as New England, against midwestern or western states with massive dairy operations.
And right now, no one is content, Pfaff said.
“There isn’t a region in the country that is happy with the pricing of milk. It doesn’t matter where you are,” said Pfaff, who grew up on a Wisconsin dairy farm. “But how do we figure out how to put together a national policy? And that’s what the 2014 Farm Bill attempted to do.”
It was clear Thursday that farmers, industry representatives and state officials were dissatisfied with the latest federal attempt.
The 2014 Farm Bill replaced a federal program that helped farmers cover costs when milk prices dropped below a certain level with a new insurance program. But at the time, representatives from Maine and other states with smaller farms questioned whether the one-size-fits-all approach would work for them.
Don Todd, director of the Farm Service Agency in Maine, said the program has not paid out much to Maine farmers, especially compared to previous federal program. So Todd said many of the farms that signed up only took “catastrophic” coverage.
Instead, many of those attending Thursday’s session said any system should account for regional differences affecting how much it costs to produce milk rather than attempt a one-size-fits-all national policy. Such an approach makes even more sense, Pingree and others said, given the growing consumer appetite for local agricultural products.
Others called for additional federal intervention to make sure farmers are paid their due from the cash register receipts. That has been a persistent complaint among farmers who accuse milk processors and retailers of pocketing all of the profits while milk producers are forced to go into debt, sell equipment or sell the farm during lean times.
“I very much appreciate what the state has done” with price stabilization, said Charleston dairy farmer Richard Perkins. “But I’d rather get my milk check out of the marketplace. If you look at what consumers are paying for dairy products, it’s there. It’s just not getting back to the farm. . . . The consumer is paying enough that the retailer, the processor and the farmer should all be running in the black.”
Walt Whitcomb, the commissioner of the Maine Department of Agriculture, Conservation and Forestry who also owns a dairy farm, agreed that there should be more discussion about making sure farmers receive their slice of the retail sale. Whitcomb also acknowledged that developing a national dairy program is challenging, given the regional diversity, and said it is unclear how the incoming Trump administration will approach the issue.
“I guess my message is stay tuned,” said Whitcomb, who served on the Trump campaign’s agricultural advisory team.
Julie-Marie Bickford, executive director of the Maine Dairy Industry Association, said she believes there are opportunities for a “healthy national conversation” about setting up a system that reflects regional differences.
“We just have to keep poking the bear in Washington – whether its the USDA or Congress – to have those discussions,” Bickford said.