Dairy Farmers Are Worried

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It’s a gray chilly day at the Bohannan Farm in Contoocook.

Empty fields stretch into the distance.

Heather Robertson’s family has farmed parts of this 450 acre bit of land dating back to 1907.

Jamie Robertson, her husband, began working here the day after he graduated high school.

TAPE: I married the farmers daughter. Got into it the old fashioned way.

20 years later the couple now owns the farm, buying out Heather’s parents.

12 months ago, Jamie says business was good.

They were getting about $21per hundred gallons of milk.

TAPE: next month we are looking at $11 per hundred lb. and that’s not fun...you take your income and cut it into half and try to keep going with a smile on your face and start asking why.

The couple isn’t so sure dairy farming is the safest business bet.

The Robertson’s aren’t alone.

Dairy farmers statewide are looking at 45-50% drops in the price they can get for raw milk.

New Hampshire Agriculture Commissioner Lorraine Merrill, a dairy farmer herself, says it’s not unusual to see big milk price swings.

But the larger economic slowdown has made this current price plunge more severe.

TAPE: many developing countries were becoming wealthy enough to upgrade their diets. And we were exporting much more milk from this country...than we had historically and that’s all come to a screeching halt.

She says a recent milk contamination scare has dried up the market in China.

So right now, there’s too much milk being produced in the United States.

Economists say as little as 1% increase in supply can change prices by 10%.

But while the prices for farmers have dropped by 50%, consumers aren’t seeing a similar drop in the price of milk at the grocery store.

USDA reports that the national average price for a gallon of 2% milk has dropped by about 7-8% in the last year.

TAPE: this is the normal ebb and flow of a raw commodity of milk out in the market place.

That’s Bruce Krupke, with the Northeast Dairy Foods Association, a trade group that represents dairy processors and manufacturers including Dean Foods and HP Hood.

Krupke says when prices go up for farmers, they profit, when prices go down for farmers, processors and retailers reap the benefits.

TAPE: so at one point in time, one segment of the industry is receiving more money than the other. And then conversely the opposite is true when the situation reverses itself.

Farmers are asking whether or not producers and retailers are willing to risk losing farms during this crisis.

Economic Forecasts call for prices to remain low over the next several months, a particularly difficult time, since the spring is when farms must decide what to plant.

One economists working with northeast dairy farmers says he knows of 15-20 operations that have either closed or are expected to soon.

Contoocook farmer Jamie Robertson says his farm wouldn’t be able to survive six months of these low prices.

But- if the forecasts are right, he’ll be in decent shape.

TAPE: for milk prices to come up dairy cows have to exit the industry. So there is a lot of investment farming...out in the Western part of the country. And investment farming is much more bottom line farming than the family farms you see around New Hampshire.

Robertson says his advantage is that those investment farms don’t have the family roots that run for 100 years.

And he says those family roots will help him and his wife stomach the storm.

For NHPR News, I’m DG.