Yesterday I enjoyed the afternoon at the North Java Volunteer Firemen’s Chicken Barbeque and Carnival.  In visting with those gathered, I spent time with a Wyoming County dairy farmer, desperately trying to sustain his small (200 cow) operation.  His four sons work the farm with him, producing maple syrup as well as milk. 

This farmer talked to me about the current milk pricing system, stating that his family is finding it virtually impossible to earn enough money to stay in business.  In fact, he told me that he clears a greater profit from sales of his secondary product (maple syrup) than milk.

Part of our conversation focused on the long-running process of milk pricing, set and controlled by the United States Department of Agriculture (USDA)…not only in what is paid to the farmer, but what store owners can charge as well. 

One of the most challenging parts of this dairy pricing is that it is evaluated and reset every month, which means that farmers cannot forecast their income with any certainty for more than 30 days at a time.  And they don’t find out that price until after their milk goes to market.

For example, in May of 2012, NYS dairy farmers received an average of $17.30 per hundredweight of milk (one hundredweight equals 12 gallons),  That price was down 60 cents from April and $4 less than they were paid in May 2011.  Additionally, when the price of gas and grain rises, so do the farmer’s costs, but traditionally not their milk price.

The bottom line is that out of each dollar a consumer spends on a gallon of milk, the dairy farmer nets a very small percentage of that dollar. In 2006, consumers paid an average of $2.40 on a gallon of whole milk,  Farmers grossed an average of $1.09 per gallon while the remaining dollar spent went to the dairy processors and retailers. After subtracting operating costs, farmers only saw a net of $0.03 per gallon of milk. That net is what the farmer is left to live off of, to send their children to college with, to pay for health care with, and to save for retirement.

Think about that the next time you pour a big cold glass of milk to wash down those cookies…and appreciate the dedication of our WNY dairy farmers in continuing to supply us with healthy foods.

Tomorrow: Greek Yogurt to The Rescue!