On state's dairy farms, price pressures are breeding trouble

Massachusetts dairy farmers are crying out for help, saying a combination of bad weather, soaring energy costs, and plunging milk prices are pushing them to the brink.

``I'm going broke," said Richard Woodger , who operates a dairy farm in Granville with 250 cows. ``It is probably the worst downturn in price since I've been in business. My strong feeling is that if something isn't done, the dairy industry here will be gone."

Vermont, Maine, and Connecticut are rushing aid to their dairy farmers, but here in Massachusetts a relief package is a long shot. The Legislature is scheduled to go out of session at the end of the month and the Romney administration doesn't seem too enthusiastic about the idea.

Two state senators, Stephen M. Brewer of Barre and Stanley C. Rosenberg of Amherst, called on Friday for an emergency appropriation of $2.95 million for retroactive payments to dairy farmers. The senators, both Democrats, say the appropriation would translate into a price subsidy of 12 cents a gallon.

A group of Massachusetts dairy farmers asked Department of Agriculture Resources Commissioner Douglas P. Gillespie for help, but the farmers said he was noncommittal. Gillespie couldn't be reached for comment.

William Gillmeister , an economist with the Agriculture Resources Department, said a state appropriation to help dairy farmers is unlikely. ``We're looking at it," he said, ``but it's probably a little bit more of a difficult sell here."

Most consumers are probably not even aware that farmers are grappling with falling milk prices, since supermarket prices have remained fairly high.

Two years ago, when the federally regulated prices that farmers receive for their fluid milk jumped to record highs, the cost of milk, ice cream, and other dairy products soared. Stop & Shop, which raised the price of its store-brand milk to $3.65 a gallon, posted signs in its stores at the time saying: ``Never before have we experienced such a large increase at one time."

But since then the regulated prices for farmers have plunged as much as 90 cents a gallon, while retail prices have fallen more slowly. Stop & Shop was charging $3.19 a gallon for its store-brand milk last week at its Dorchester store, off 46 cents from the 2004 retail peak. Peapod, the online grocer affiliated with Stop & Shop, was charging $3.79 for store-brand milk.

Shaw's Supermarket, which was also charging $3.65 a gallon for its store-brand milk two years ago, was charging $3.29 a gallon last week for regular and 2 percent milk, while its skim and 1 percent milk were on sale for $2.29. Shaw's was selling Garelick-brand milk, the same milk used in its store brand, for $3.59 a gallon.

``What has happened is that the retail industry has figured out that consumers will buy so much milk and only that much," said Woodger, the dairy farmer from Granville. ``Their view is: `Let's make as much money as we can while we can.' "

Dairy farmers don't have that luxury. The prices they receive for their milk are set by federal regulators using complicated formulas reflecting the price of milk and cheese elsewhere in the country.

As milk production has slowly increased the last two years, particularly on enormous dairy farms in the West, the price New England farmers receive for their milk has steadily declined.

The decline in income from the sale of milk has coincided with dramatic increases in fuel, electricity, and fertilizer prices.

The wet weather has also delayed hay harvesting and made it difficult to plant corn.

For many farmers, the price they are receiving for their milk right now is well below what it costs them to produce it. When Connecticut Governor M. Jodi Rell this month revealed $2 million in direct payments to the state's 165 dairy farmers, she said farmers there were losing 50 cents a gallon.

Maine has an ongoing price support program that will funnel as much as $25,000 to each of the state's 354 dairy farmers this year. Vermont, the region's largest milk producer, disclosed plans three weeks ago to distribute $8.6 million in emergency relief to about 1,100 dairy farms.

Mark Duffy, who milks 65 cows at his Great Brook Farm in Carlisle, said he sells cow manure and runs an ice cream stand to help make ends meet, but he is nevertheless having difficulty absorbing the sharp rise in operating costs.

``We have no way to pass our increased costs along. We're stuck in the middle," he said.

Robert Wellington , an economist with Agri-Mark, the Methuen dairy cooperative, said data developed by First Pioneer Farm Credit, a major lender to the agricultural industry in New England, indicate the average Massachusetts dairy farmer is paying himself nothing right now for his labor and investment and is still losing $4,500 a month.

Jimmy Larkin and his dad, James J. Larkin , say they are doing worse, running a deficit ranging from $7,000 to $12,000 a month on their dairy farm in Sheffield.

New England has lost a fifth of its dairy farms in the last five years. Massachusetts dairy farms have disappeared at a slightly faster pace, falling from 241 five years ago to 174 today, a drop of 28 percent, according to the US Department of Agriculture.

The business has become so tough that some New England farmers are going through an arduous process of switching to organic milk production, which is more lucrative.

Milk won't disappear from Massachusetts supermarket shelves if dairy farmers here keep going out of business, but as the number of dairy farms keeps declining milk must be trucked in from farther and farther away with corresponding increases in shipping costs.

Wellington describes the farms here as moderate-size businesses that generate about $500 million a year in total economic activity and that help the region maintain a ``working landscape" in rural areas.

``We're in the midst of a disaster," said Duffy, the Carlisle farmer. ``What we want to know is what help is available."

Bruce Mohl can be reached at mohl@globe.com.