Conn. dairy farmers diversify as number of farms, milk prices drop | Crain's Connecticut

Conn. dairy farmers diversify as number of farms, milk prices drop

  • The Farmer's Cow Calfe and Creamery. | Courtesy of the The Farmer's Cow LLC

    The Farmer's Cow Calfe and Creamery. | Courtesy of the The Farmer's Cow LLC

  • The Farmer's Cow Calfe and Creamery, Mansfield. | Courtesy of the The Farmer's Cow LLC

    The Farmer's Cow Calfe and Creamery, Mansfield. | Courtesy of the The Farmer's Cow LLC

  • The Farmer's Cow Calfe and Creamery, Connecticut. | Courtesy of the The Farmer's Cow LLC

    The Farmer's Cow Calfe and Creamery, Connecticut. | Courtesy of the The Farmer's Cow LLC

Connecticut's dairy farm industry has shrunk by a third in the past four years, but the remaining farmers are fighting on with a mixture of grit, diversification and mergers.

The number of farms has dropped to 100 from 150, according to Connecticut Department of Agriculture spokesman Steven Jensen, who cited rising costs of production including animal feed as well as declining subsidies and lower milk prices as factors. Yet Connecticut milk production has increased during the period, reaching the level of 10 years ago, according to Rigoberto Lopez, head of the Department of Agricultural & Resource Economics at the University of Connecticut.

Larger herd sizes, diversification, and efficiency are the key components of dairy farm survival these days, Connecticut farmers and academics say.

“While the number of farms has been declining in this period, the average production of milk per farm is increasing due to the economies of size and increased efficiencies,” Lopez said.

Robin Chesmer, whose family owns Graywall Farms in Lebanon, said his operation’s herd size has grown to 600 cows from 400 during the past five years. Graywall is one of six Eastern Connecticut farms that make up The Farmer’s Cow LLC. All farms in the cooperative have increased their herd sizes during the past few years, Chesmer said.

Some family farms throughout Connecticut have merged their herds as a way of keeping costs down, he said. The Farmer’s Cow was created in October 2005 and has had the same farms in it all along.

“We’ve had inquiries about (other farms) joining, but we haven’t been in a position to expand,” Chesmer said.

Connecticut milk sales today constitute just 1.5 percent of sales in the Northeast. Chesmer said that's because Connecticut’s dairy industry hasn’t done a good job marketing itself.

“We’re in the largest consumer market, being between Boston and New York, yet we’re still struggling to establish our brand,” he said. “There’s definitely opportunity out there.”

Dairy farms are getting bigger, more efficient

While dairy farm products constitute 13 percent of the value of products originating from Connecticut farms, dairy farms make up half of Connecticut’s cropland, said Henry Talmage, executive director of the Wethersfield-based Connecticut Farm Bureau. Though the number of farms has dropped, the total number of cows has continued to hold at between 20,000 and 22,000, he said.

“Farms are getting bigger,” Talmage said in a phone interview. “That is the trend throughout New England. They’re getting much more efficient. The yield per animal is up.”

Increasing production, domestically and internationally, has ushered in an era of lower milk prices, making it harder for Connecticut farmers to compete given their high costs.

“In a commodity-type market it doesn’t take much to deflate prices,” Talmage said.

Despite the impressive productivity of remaining operations, Connecticut dairy farms don’t produce enough milk to cover the demand of the home market, Talmage said. He called Connecticut a “milk deficit” state, saying that it imports double the amount of milk that is produced by its farms.

Connecticut also imports a great deal of its animal feed from the Midwest as well as from New York and Pennsylvania. Those transport costs boost the feed bills paid by Connecticut dairy farmers, Talmage noted.

“We’re kind of the end of the line on the transport routes,” he said. “Connecticut farms, especially the smaller ones, don’t have the buying power to chisel down those prices.”

A corn price spike in 2013-14 sent feed prices higher and squeezed some Connecticut dairy farms out of business, Talmage said.

“That was a really tough time for our farmers,” he recalls.

Fewer state funds available; hopes pinned on 2018 Farm Bill

Meanwhile, subsidies that have helped farmers weather market turbulence are not as abundant as they once were. Connecticut’s budget problems have caused a drawdown in the Dairy Sustainability Account created in 2009, with some of the money diverted to the state’s general fund in the past two years.

“It’s operating at half-strength now,” he said. “We need that money more than ever. But we’re all aware of the budget struggles we face in Hartford.”

Connecticut’s Congressional representatives have tried to bolster farm incomes through appeals to the U.S. government but without much success recently.

 

U.S. Rep. Joe Courtney, a member of the Congressional Dairy Caucus, said he would like to have a meeting with President Donald Trump’s agriculture secretary nominee, former Georgia Gov. Sonny Perdue, after Perdue’s expected confirmation by the U.S. Senate.

"I would like to establish a line of communication and get some of the ideas that were left in the pipeline moving again,” Courtney said in a phone interview.

Amid talks with members of the House Agriculture Committee, Courtney said he is hopeful that the 2018 Farm Bill will contain important data and revisions to will help Connecticut farmers, especially the dairy industry.

“I think we can get a really strong bill that addresses the issues the farmers back home are facing,” he said.

Connecticut market moves toward specialty products

Connecticut’s increasing inability to compete by volume in undifferentiated milk production against giant exporting states with lower unit costs like New York and California is forcing Connecticut to become a specialty dairy market, according to UConn's Rigoberto Lopez.

Some of Connecticut’s milk is sold to processors in nearby states, he noted.

“Rather than a localized, state-only market, it is better to characterize the Connecticut dairy industry as increasingly relying on value-added products…such as artisan cheese, ice cream, and yogurt,” he said. “Residents in Connecticut and New England are willing to pay a premium for these types of milk products.”

Connecticut milk is used in cheeses produced by Mystic Cheese Co., Calabro Cheese Corp. of East Haven, and Arethusa al tavolo in Litchfield, for example. The cheeses are sold in upscale supermarkets and affluent New York neighborhoods, Lopez said. Calabro’s website says its products are sold as far away as Colorado and Texas.

Diversification is another name for this. Some operations are getting increasingly creative in marketing, Lopez said. The Farmer’s Cow has added items such as eggs and lemonade to its bedrock line of dairy products. The group opened The Farmer’s Cow Calfe and Creamery in August 2012 in Mansfield. Spokeswoman Mary Ann Dostaler calls it a “one-of-a-kind” eatery serving breakfast, lunch and dinner. Its serving bar has 30 different milk flavors, she said.

As for dairy farms that have gone out of business, their lands are eligible for preservation through a longtime Connecticut Department of Agriculture program. Under certain conditions, farmland may also be eligible for preservation under an open space preservation effort known as the Green Plan, announced this week (Feb. 13) by the Connecticut Department of Energy and Environmental Protection, department officials said. The two programs are “complimentary” said Jamie Sydoriak, a property agent in DEEP’s land acquisition and management unit.

 

February 15, 2017 - 6:31pm