GEORGE F.W. HAENLEIN
Extension Dairy Specialist
University of Delaware
NEWARK, Del. Of course,
the price of milk is too low.
Who can argue that current milk
production costs, even without
factoring in appreciation of assets
and reasonable manager compen
sation, is equal to the farmgate
payment for milk?
No bank orinvestment company
could continue to operate under
such conditions, yet dairy farmers
stay in business by tightening then
belts and worrying.
I do not criticize, but I have to
ask what else are you doing
about this “challenge” to your live
lihood?
You are not alone this situa
tion is the same worldwide.
I grew up on a small diversified
farm, which made a fair living
milking between six to eight cows
and harvesting many different
crops.
Now in Europe, fanners, just
where I was, are being told by
Common Market officials that the
“dairy farm of the future" will have
at least 60 cows!
What a challenge to these small
farmers, many of whom will disap
pear within a generation under
such a policy. Yet this turn of
events was inevitable. We have
outsmarted ourselves with re
search-based progress that often
FARMCOVER
A competitive new Insurance program for farms in Pennsylvania, Delaware and Maryland.
Goodville Mutual has served
the community since 1926.
We offer a farmowners package
policy for dairy, swine, poultry
and crop farms.
We also offer insurance packages
for homes, vehicles, businesses
and churches.
Strategies For A Too-Low Milk Price
exceeds the demands of the con
sumer population.
As a result of our quest for pro
gress in genetics and in more effi
cient management, we are produc
ing surpluses of dairy products.
U.S. Cooperative Extension has
translated these technological re
search advances into management
progress on the dairy farm far be
yond the need of domestic con
sumer demands. As a result, it was
hoped that government officials
would travel abroad to “peddle”
our surplus dairy products to other
countries.
This “peddling” often has not
worked too well. At least, it seems
as though U.S. poultry producers
are much more successful in sell
ing their broilers abroad. Maybe
their advertisement is more effec
tive or their price is more attrac
tive.
Of course, we dairy producers
have been so eager to rid ourselves
of government interference in
dairy business and milk marketing
orders that we now may well have
stranded ourselves somewhat
If we produce too much, we can
follow one of two strategies
produce less or sell more.
High feed costs force many
dairy farmers to buy less concen
trate supplement, to rely more on
farm-grown feeding and to switch
to more grazing. But this also
means lower milk production.
To get the name of a Goodville farm agent in
your area call 1-800-448-4622 or 717-354-4921
locally and ask for a farm underwriter.
Look for our display at the Keystone Farm Show,
January 6 and 7, 1998, Memorial Hall,
York Fair Grounds, York, PA, Booth H 129.
Stop by our booth for your free gift, and if you
are a Goodville policy holder, please Introduce
yourself.
A*.
Goodvllle Mutual Casualty Company
625 W. Main Street, P.0.80x 489
New Holland, PA 17557-0489
which an ovetsupplied market
might welcome.
The produce-less strategy may
mean that the glory days of super
records of cows under DHLA
award systems and young sire
proving plans may be in question.
The sell-more strategy has some
farmers organizing on their own
for self-help, because they have
become frustrated with govern
ment officials.
It sounds as though U.S. dairy
farmers unknowingly are in a
transition state similar to their
counterparts in the former com
munist states: Get rid of govern
ment support, intervention and
subsidy.
On the other hand, when
government minimum prices and
support have ceased, where docs a
sufficient monthly cash flow to the
dairy farm come from? Is this the
dairy producer’s Catch 22?
Dairy farmers in the former So
ciet Union are up against similar
problems, and they are working
hard to find alternatives.
Having been in Romania and
Macedonia several times recently,
I have seen firsthand what this
means.
United States volunteers from
the Mid Atlantic region, and orga
nizations, including our own Land
O’Lakes Company, have extended
a helping hand to those struggling
dairy farmers.
Lancaster Fanning, Saturday, December 27, 1997-Al9
Who, you may ask, is extending
a hand to struggling U.S. dairy
farmers?
Self-help is happening in the
United States, too.
Many dairy farmers have in
creased their herd size tremend
ously. This works, to some extent,
under the law of “economics of
scale.”
For the first time ever in Dela
ware, there are dairy herds above
500 cows milking. But bigger will
also mean more risk.
Such a strategy docs not neces
sarily mean better net income, be
cause of the dependence on skilled
and reliable labor, now the num
ber-one problem according to
several studies.
What other alternatives do
struggling dairy farmers have
when the milk prive at the farm
gate is too low and they do not
want to sell out to developers?
Value-added production or
“vertical integration” has been a
positive alternative for many dairy
farmers, especially in states that
support these initiatives such as
Pennsylvania.
It is legal and not too difficult in
Pennsylvania to start your own
milk-bottling business and sell
milk retail from your farm at a
much better price, even under a
raw-milk license.
Not so in neighboring states.
My son-in-law recently showed
me some slips he received for new
born bull calves.
Lancaster
Poured
Walls
• Agriculture I _____
• Commercial • Residential L— L
Call for Prices On:
• SCS approved Manure Storage Pits
• Basements • Retaining Walls
• Footers • Floors
Customer Satisfaction is Our Goal
Lancaster Poured Walls
2008 Horseshoe Rd. • Lancaster, PA • (717) 299-3974
vestock Management
It’s a fact l Contaminated water can have a costly effect on your
livestock and poultry performance. Our years of experience plus
hundreds of farm related treatment systems has proven the validity
and practicality of correcting contaminated water.
faMartin
WATER CONDITIONING
Your Water Treatment Center
Call us today for treatment of:
* Nitrates * Bacteria *lron * Sulfates
* pH - Acidity!Alkalinity t
740 E. Lincoln Ave
Myerstown, PA 17067
Ph: (717) 866-7555
800-887-7555
308 W Penn Ave RD #3 Box 109 G 309 W 4tn St
Cleona, PA 17042 Stoystown, PA 15563 Quarryville, PA 17566
Ph. (717) 273-7555 Ph. (814) 893-5081 Ph. (717) 786-7373
800-893-5081
They showed $0 net, because
the price of hauling to auction and
the auction commission equalled
the current, extremely low, price
for a healthy 90-pound Holstein
calf!
How can dairy fanners survive
under such conditions?
Auctioneers get their money one
way or another, butchers also get
theirmoney, but the fanner who
bred the cow, fed her for the 9‘/j
months of pregnancy, delivered
the calf through sometimes diffi
cult and costly birth gets no
thing for all the work and invest
ment!
Some dairy farmers say that pro
duction does not pay anymore un
less it includes butchering and re
tailing another example of
vertical integration.
The same challenge confronts
dairy fanners with milk produc
tion.
Whether we like it or not, some
thing has to give.
Cooperatives were formed sane
70 years ago as the solution to
regulate market surplus and milk
demand in relation to a fair price
for the farmer.
Today, when similar hardship
conditions exist, what solutions
arc cooperatives offering?
Although many dairy farmers
are discouraged, some are opting
fa their own retail businesses a
adding value to their milk produc
tion by making and retailing their
(Turn to Page A2O)
Water Quality
an IMPORTANT
Ingredient In
548 New Holland Ave
Lancaster, PA 17602
Ph: (717) 393-3612
800-224-3612