Bealeaguered farmers ask for a boost in milk prices
Massachusetts dairy farmers are asking state officials to declare an "economic emergency" and set prices for milk that would allow them to at least cover their costs.
The farmers petitioned the Department of Agricultural Resources to declare an emergency in late January, turned out in force for fact-finding hearings in Amherst and Boston in March , and flooded state officials with touching letters describing how they are on the verge of going out of business.
The consensus at the hearings was that 189 dairy farms are left in Massachusetts, but state Senator Stephen M. Brewer of Barre said last week that he now believes the number is down to 167. He said the state's largest dairy farm has received a foreclosure notice.
Jim and Krisanne Koebke , who milk 75 cows on a nearly 100-year-old dairy farm in Dudley, told state officials their situation is precarious. "It is a fact, not a dramatic statement, when we say that we wonder every day if we are making the right decision by staying in business," they said.
Tedd F. White of Hawley sent state officials a single sheet of paper tallying up what it costs him to produce milk and what he is paid for it. By his calculations, his costs are 25 percent greater than his revenue.
For most dairy farmers in Massachusetts, 2006 was a nightmare. What farmers are paid for their milk is determined largely by federal formulas using national prices for butter, cheese, nonfat dry milk, and dry whey. Those prices plummeted last year as milk production soared on giant dairy farms in states such as Texas, California, Idaho, Colorado, and New Mexico.
Even as milk prices fell, the cost of feed, fertilizer, and energy soared. Industry specialists say the typical Massachusetts farmer lost $40,000 to $60,000 last year. Milk prices are rebounding this year, but dairy farm losses are expected to continue because production costs also are increasing.
Brewer estimated Massachusetts dairy farmers on average last year were paid $1.14 for a gallon of milk that cost them $1.70 to produce.
"This is not some paper loss or accounting gimmick. It's real money, meaning a very substantial financial hit on the average dairy producer," said Gregory Melnik , vice president at First Pioneer Farm Credit in Enfield, Conn.
The Massachusetts farmers are asking state officials to require dairies like H.P. Hood and Garelick Farms to pay more money for their milk. They are also asking that "a system of payments be established to compensate producers for environmental stewardship, open-space preservation, or increased production costs."
Connecticut, Vermont, and Maine have funneled financial aid to their dairy farmers. Connecticut, which produces slightly more milk than Massachusetts, last year provided $2 million in direct payments and $2 million in low-cost loans to farmers.
Massachusetts law gives the Department of Agricultural Resources the power to regulate milk prices, but it's unclear whether the Patrick administration will embrace that role. Agency officials declined to comment.
Robert D. Wellington , senior vice president and economist with the Agri-Mark Inc. dairy cooperative in Lawrence, said price supports may actually be counterproductive, since higher prices for Massachusetts raw milk may prompt dairies here to buy more milk from out-of-state farmers.
Christopher P. Flynn , president of the Massachusetts Food Association, which represents the state's supermarkets, warned that "any price increase will be paid by the consumer."
Bruce W. Krupke , executive vice president of the Northeast Dairy Association, said there is no emergency, particularly since milk prices are starting to rise. He said the real problem is that milk consumption nationwide has dropped roughly 50 percent on a per capita basis since 1960.
"There is a milk consumption crisis, but what can the state do to reverse the trend?" he asked.
Many proposals to help dairy farmers are circulating on Beacon Hill. Brewer has filed legislation that would assess fees on the milk consumers buy at local supermarkets and send that money to dairy farmers
Another bill would link the price a consumer pays for milk to the price the farmer receives by barring retailers from selling milk for more than 200 percent above the farm price.
Last year, when Massachusetts farmers were being paid less for their milk, retail prices in Massachusetts barely budged, at one point topping $4 a gallon for some brands.
Tom Davis , general manager of Garelick Farms in Franklin, said the government should not bail out dairy farmers who are just going through yet another boom and bust cycle.
"No matter what happens," he told state officials at one of their hearings, "this industry consolidation will continue."
Gould last year received a replacement refrigerator from GE after the Globe publicized her gripes about a bottom-drawer freezer that periodically froze the contents of the fruit and vegetable bins above it .
The new refrigerator was delivered in June, but Gould's frustration has not gone away. The refrigerator arrived with a broken ice machine and a bottom-drawer freezer that didn't slide in and out properly. The company quickly made repairs.
Since then, Gould says, a plastic shelf inside the door gave way and fell out, the hinges on a shelf inside the refrigerator cracked, and, most recently, the plastic frame holding the shelf above the fruit and vegetable bins developed a crack. GE has sent repair parts each time.
"It's obvious it's poorly manufactured," said Gould, who says she sometimes feels like she is working as a quality control officer for GE.
Gould periodically writes GE chief executive Jeffrey R. Immelt to voice concerns about her refrigerator's workmanship. She insists her refrigerator woes are symbolic of how poorly American companies are treating their customers.
Allison Eckelkamp, a GE spokeswoman, said the company upholds the highest standards of quality when designing and making products. "If a product problem does arise, we strive to meet or exceed the consumer's service and product expectations. In this individual case, GE replaced Ms. Gould's six-year-old refrigerator with a brand-new model in 2006. Since that time, GE has replaced a cracked shelf and repaired her ice maker. GE sincerely apologizes for the unusual number of problems she's had with her refrigerator."
Bruce Mohl can be reached at mohl@globe.com. 