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Scott Williams loves to drive to the highest ridge on his farm and look out at the patterns of the hay and cornfields and through the cedars to his grain silo and milk barn. But lately the third-generation dairy farmer has been looking at this land, the cows and the fields with as much sorrow as pride.
He mulls over questions: How do we manage to stay in? Can we afford to get out? And what would I do?
The livelihood of the small dairy farmer has been in crisis mode for some time. In 1964, Kentucky had 58,689 dairy farms. By 2007, the most current Census data available, the state was down to 2,277 farms. In Spencer County, from 1992 to 2007, the number of dairy farms dwindled from 75 to seven.
Williams was hard-pressed to name more than three dairy farmers beside himself. Dairy farms are disappearing faster than cream turns to butter.
Why? Simple supply and demand. But also in part because the prices milk fetches on the market haven’t kept up with rising production, distribution and retail costs.
Farmers typically need to make $16 for each 100-weight of raw milk to break even. This month, Williams said he hasn’t cleared $11. These are 1980s prices, according to USDA records.
With the help of his stepson Matthew and brother Doug, Williams milks 42 cows twice a day in his double-four parlor. They’ve milked as many as 100 cows at one time.
“The logic of more cows isn’t always the right answer,” Williams said, equating more cows with more feed expenses.
Keith Baird, also a third-generation dairy farmer, tends to agree. He and his father John are milking 50 cows. His uncle, Marlyn, milks 40 cows and told Baird ironically that a small herd seems to be the only plus right now.
“I guess we can take pride in the fact that we’re losing less than a lot of other people,” Baird said. “But definitely it has been a struggle.”
Like Williams, Baird is at the point of desperation.
“I’ve been there for a while now. We’ve culled a lot of cows. You don’t really want to borrow money in the middle of a recession,” Baird said.
There are a lot of variables in the dairy industry, Baird explained. He received record high prices in the last two years. Demand globally was up because areas like Europe and New Zealand weren’t very productive. Still, with the drought, feed prices were high. Now the market is flooded and the prices have been cut in half.
“The pricing structure in general is very complicated and needs to change,” Baird said. “Once you produce milk, the clock is ticking. We’re stuck with whatever the price is at that moment.”
“The price that comes back to the dairy farmer is driven by the price of commodities,” said Richard Sparrow, Regional Manager for Dairy Farmers of America, which works with producers, haulers and processors.
Those commodities are two different weights of cheese, butter, nonfat dry milk and whey. The USDA has calculated a pricing system based on what these commodities trade for on the national market. It doesn’t matter what the raw milk is going to be used for, though butterfat content and quality tests like bacteria counts influence what a farmer receives. Yes, it’s complicated.
Farmers receive about 25 percent of what shoppers pay for a gallon in the store. And they have no say in the price of milk, be it raw from their farm or chilling in the grocery. The whole downturn this year has strained relationships along the chain, said Baird, as well as between small and large farmers.
Usually, Baird said, downturns only last 2-3 months and are followed by a nice rebound. This year prices have been low, well, all year.
“But I’ve ridden it this long,” he said. “I hate the notion of selling all the cows. It’s gambling.” Baird, 48, works solely on the farm. Williams, on the other hand, has taken a part-time job at the county recycling center in addition to the milking and raising hay, corn and alfalfa on the 900-acre farm.
It’s doubtful Matthew will carry on the family tradition, Williams said, though nostalgia makes that hard to admit. His voice is warm when he recalls working the farm with his father and grandfather.
“That was time spent with my dad. And some days we worked pretty hard, and yeah, we had some slack time, but we had fun while we did it,” Williams said. “It’s a way of life where once you get it into your system it’s hard to get it out. It’s not like going into a factory and punching a time card.”
He apologizes to his wife, Angie, for his moodiness. The uncertainty of dairy farming is too great sometimes. Williams, 46, is in dire need of a rebound. But at least his sense of humor is unshakable.
“You know they’re going to stop making round hay bales?” He says, pulling his truck up to the barn. “Cows can’t get a square meal.”