The average Massachusetts dairy farm milks 100 cows, and produces almost 2 million pounds of milk, or about 232,000 gallons of milk per year.
The Problem Farm milk prices have been extremely low, at 1981 levels. The average 2006 farm price was $1.14 per gallon versus the average 2005 price of $1.33 per gallon. The result was at least $44,270 in reduced income.In a typical year, the average Massachusetts farm nets $25,000-$40,000 to cover family labor. Labor was not paid in 2006, replaced by large losses. Some farms support multiple families and all of the families suffered losses.
Even though the farm price has recovered in 2007 to $1.98 per gallon, production costs continue to rise to approximately $1.85 per gallon.
Milk production costs are high, especially feed and energy. In 2006, feed costs increased approximately $1.00 to $2.00 per hundredweight (cwt.). Milk is sold on a per cwt. basis, which equals 11.6 gallons. This increase in feed costs meant extra costs of about $20-$40,000 per farm. Energy, health insurance, labor and other costs also increased substantially.
Gross profit margins in retail milk sales have doubled in the last 10 years. Because of market failure, these price increases have not been passed upstream to farmers. Massachusetts could lose 1/3 of its dairy farms this year, big or small, without some sort of meaningful financial relief.
There is a critical mass of dairy farms necessary for a viable industry, and a viable economic support structure of milk trucks, processing plants, and the many businesses selling feed, fertilizer, seed, equipment, pharmaceutical supplies, etc.
Public Benefits and Services Dairy farmers contribute public services in the form of open space preservation that makes the state so unique, working landscapes, environmental stewardship, and preservation of agrarian culture. The market is not compensating producers for these services.
Legal Barriers Past court decisions have hindered state efforts to intervene in the market. However, we believe the state has the ability to protect its interests in public benefits and services.
Solutions Chosen By Other States Vermont and Connecticut have provided millions of dollars in direct, short term relief to their dairy farm families to compensate for 2006 losses, and preserve their businesses.
Maine has enacted a long term relief program providing producers with on-going state payments when farm prices are low, in conjunction with a tax on retail milk. Pennsylvania has established minimum state prices, and the U.S. Court of Appeals for the Third Circuit has upheld this program.
New Jersey has established a price above the Federal minimum price in the form of a fuel surcharge for producers.
New York has a maximum milk price law to protect consumers from "price gouging." The law requires retailers to carry one line of milk that does not exceed a price equal to 200% of the processor's purchase cost of farm milk. The retailer can price all its milk as it pleases, except one line of milk must be subject to the law. This has protected New York consumers, but not dairy farm families who receives a far too little share of the retail dollar.
The Massachusetts Dairy Farm Revitalization Task Force The establishment of the Dairy Farm Revitalization Task Force was one of the Commonwealth's reponses to the dairy crisis. The Task Force consisted of 17 members who represent various interest groups and has a purpose of investigating short and long-term solutions to preserving and strengthening the dairy farm industry. The Task Force completed its work in early November and their Report to the Legislature is currently in the being finalized. For a more complete summary of the Task Force's enabling legislation, go to the Revitalization Task Force Page
If you would like more information about Massachusetts dairy farmers or find out how you can support the revitalization of dairy farms in the Commonwealth, please use the Support/Contact Us page.
