In the previous post, Massachusetts Farming in a Nutshell, there were two main points that stood out to me:
- 80 percent of Massachusetts farms are family owned.
- In Massachusetts, there is $42M in direct sales from farmers to consumers.
Now, what this means to me is that Massachusetts family farms are raking in the big bucks for selling directly to consumers. On my farm, and a lot of the farms in the area I grew up, there was little to no direct sale between farmers and consumers. My parent’s sold our milk to a local creamery, which then passed through multiple hands and wound up at Land O’Lakes. This company then processed the raw milk and made it into butter, cheese, milk, sour cream and cream before putting it on grocery store shelves. As a small farm, we did not have the means or the equipment to make any of these products. Unless you count the whole “making butter in a jar” routine, which is hardly efficient or sufficient for a family of 9 . . . although it is quite fun.
As I mentioned in Farm Fresh, my parents sold out of the dairy business in 2000. The decision to do this was a slow and painful process for my parents. In the words of my mother, it was get out or lose the farm. We loved—and continue to love—our 160-acre farm.
My parents milked cows together for 21 years. Throughout those 21 years, there were 7 or 8 years in which it cost more to milk the cows than the milk was earning back. The last 3 or 4 years my parents milked, they consistently lost money. The accumulated debt from these years is what finally convinced my parents that this was a storm they could not ride out.
At the peak of milking, we had 180 Holstein—the famous black and white spokescow that plasters dairy products. When milk prices began their decent, my parents started to keep the bull calves—the baby boy cows—that were born to raise and sell them as beef. They became steers—castrated boy cows—and would roam our pastures getting fat and ready for butcher. As the number of steers went up, the number of Holsteins went down. We had 160 steers at the steer-peak, and about 60 Holsteins. My parents slowly sold off both to make up for the deficit from the low milk prices. In 2000 we were left with an empty barn and not a single Bessie in sight.
Now, to address the infamous milk prices. I’m going to throw a lot of numbers out there, so bear with me; I’m about 95 percent positive we’ll make it through alive.
When raw milk is bought from a farm, it is bought by the hundredweight. This is equivalent to 100 pounds. It cost my parents $10 per hundredweight to produce the milk. This price includes the cost of electricity, feed, supplies, medicine, disinfectant, labor and any other cost associated with the milking process. In the years before my parents sold out, they were getting paid by the creamery $7.80 per hundredweight.
Now, to put it in terms normal people can understand:
- One hundredweight is a little less than 12 gallons of milk.
- It cost my parents 83 cents/gallon to produce the milk.
- My parents were paid 65 cents/gallon for the raw milk.
- In 2000, the stores charged $2.75 to $3/gallon for processed milk.
Stores charged (and still do!) up to $3 for a gallon of milk. Keep in mind that companies like Land O’Lakes are also able to produce butter, cheese, sour cream and cream from the 65-cents-per-raw-gallon of milk they buy from farmers.
The numbers make it nearly impossible to deny: Farmers get the short end of the stick. So, whose fault is it? Like any problem, there are multiple factors that contribute to the problem. When I asked my dad—who I not-so-secretly think is one of the smartest men in the world—he laughed and said, “Oh Sam. You’ve only just scratched the surface.”