October 8, 2018
Letter to the Editor:
Every dairy farmer I talk to is rightly concerned about the persistent low prices that force farmers out of business on a daily basis. At the same time, we family dairy farmers face another challenge that we don’t so often talk about. That challenge is the rapid move away from family-sized dairies and into investor-owned dairies so large that each new one can replace dozens of farms like mine.
I recently heard Dr. Richard Levins address the board of the National Farmers Organization on this subject. He talked to us about what U.S. dairy farming would look like if every dairy had 10,000 cows. Here are some highlights of what he said:
• There would be fewer than 1,000 dairies in the United States.
• Cooperatives with large numbers of smaller farms would have enormous membership loss. For example, the 2016 list of Top 50 Dairy Cooperatives showed DFA with 47.3 billion pounds annually of milk produced by 7,938 member farms. With 10,000 cow dairies, 167 of them would produce that much milk, maybe more, and could result in severe environmental issues and social concerns. What happens to the other 7,771 member farms and the local businesses they support?
• The smallest 11 cooperatives on the Top 50 list in 2016 had total production less than that of a single 10,000-cow dairy. How do you compete as a cooperative of 100 or more farmers in that environment?
Dr. Levins went on to say that research he has seen indicates the largest dairies have significant cost advantages for two reasons. One is they have lower production costs on the farm. The other is the cost to assemble milk from mega-dairies is much lower than that for getting the same amount of milk from hundreds of small dairies. Because of these cost advantages for very large farms, he thought the trend of ever-larger herd size would continue regardless of milk price levels unless new policy is put in place to turn things around.
Some of you reading this are no doubt thinking that this hypothetical example is too extreme. Sure, we have very large dairies, some of them larger than even 10,000 cows. But there will always be smaller dairies like mine, too. I hope you are right. At the same time, I don’t see anything in economic theory or in current dairy policy that will prevent this from happening.
Sure, policy that brings better prices to all producers is now more important than ever. But let’s not forget about policy that makes sure family-size farmers are around to take advantage of those better prices. “One size fits all” pricing policies have not worked as a way to save family farming in the past, and they won’t work in the future. Let’s all work together to come up with a “structure management” policy that keeps family dairy farming as an option for generations to come.
Fred Wayne Prichard,
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