Erie County farmers struggle as milk prices remain low
WATTSBURG (AP) — Dean and Suzanne Curtis paid a price in sweat, 14- and 16-hour workdays, scraped knuckles and vacations they never took.
But together, the Venango Township couple built something. They own 515 acres, a herd of 150 dairy cows and the buildings and equipment needed to produce thousands of gallon of milk each year.
In 2009, they were just months from having all of it paid off.
Then came the recession and a historic tumble in the price of milk.
Today, two refinanced mortgages and seven years of unreliable milk prices later, the idea of being debt-free seems like a distant memory, said Dean Curtis, who has been farming for 50 of his 64 years.
Curtis said he and his wife have far less debt than many dairy farmers, but worry that some fellow farmers might not survive a pattern of low prices that has persisted through 2015 and most of this year.
Few places in Pennsylvania have seen a more dramatic decline than Erie County, where the number of dairy farms fell 57 percent between 2002 and 2012, sliding from 170 to just 73. That’s according to the 2012 Census of Agriculture, which provides the most recent numbers available.
The loss of dairy farms in other parts of the country has been more gradual, but substantial. In 2002, Pennsylvania was home to 9,629 dairy farms. Ten years later, that number had fallen to 7,829 farms. In Crawford County, 217 dairy farms became 181.
Low prices, coupled with drought conditions in New England, contributed to the loss of 19 of New Hampshire’s 120 dairy farmers in the past few months, according to The New York Times.
Curtis believes that decline has continued.
“We are one of the last ones standing,” he said.
Some of those who remain appear to be in trouble. Curtis, president of the Erie Crawford Cooperative, a farmer-owned feed mill, sees it in the growing list of farmers who are delinquent in paying their feed bills.
“It’s ridiculous,” he said. “I’m not angry at the farmers at all. It’s the whole farm economy that is ridiculous and what farmers are expected to live on.”
As recently as 2014, dairy farmers were collecting some of the highest prices in history, said James Dunn, professor of agricultural economics at Pennsylvania State University.
Farmers, who sell milk not in gallons, but in 100-pound increments, were collecting an average of $25.64 per hundred pounds or the equivalent of about $2.98 a gallon in 2014, Dunn said. In 2015, that fell to $18.48 per hundred pounds or $2.14 a gallon. For the first six months of this year, he said, the price fell to $16.45 per hundred pounds, about $1.91 a gallon.
There’s little agreement about how much farmers need to break even.
“There are people who have all different costs of production,” Dunn said. “It has a lot to do with when they bought things, how well their crops worked out and the decisions they made over time.”
What Dunn can say is this: “Somebody who expanded in 2014 thinking that (price) was the new normal has been severely disappointed.”
Roger Gilkinson, who said he’s one of three remaining dairy farmers in Greenfield Township, resisted the urge to expand when prices were high.
“I knew it wasn’t going to last,” he said.
Today, as he finds himself trying to scrape together enough money to pay off a loan he took out to plant his crops this spring, Gilkinson said he doesn’t regret his caution.
“I kind of go without so I can at least pay the bills,” he said. “I would like to do other stuff, but it ain’t going to happen.”
Gilkinson, 55, said he’s not greedy. He doesn’t need for milk to return to $25 per hundred pounds. He would settle for a reliable $19.
But he’s not sure that’s going to happen.
“It’s in a bad spot right now,” he said.
Dunn, who has been an agricultural economist for more than 40 years, said this isn’t the first time he’s been witness to the boom-or-bust cycle.
“These cycles have been going on my whole life,” he said. “Agriculture is always evolving. It’s a matter of who is left in the wake.”
This time around, lower milk prices are being driven in large part by the strength of the American dollar, which is hurting attempts to export milk.
U.S. farmers typically export between 12 percent and 17 percent of the milk they produce. A strong U.S. dollar has, at least temporarily, pushed that number to the lower end of the range. That has made it difficult to find a buyer for the extra milk on the domestic market, Dunn said.
There are some hopeful signs for farmers. While milk prices are down this year, prices have risen in recent weeks.
“You can’t get too excited,” Dunn said. “You have to remember you are going to have good periods and bad periods.”
That’s a lesson Dean Curtis said he and his wife learned years ago.
Although prices were lower a few years ago, he worries about the cumulative effects on farmers who can’t bank on a price that will ensure their profitability.
“This is not a good time,” he said. “We are losing farmers right and left. Pretty soon there aren’t going to be any left.”
Curtis thinks that would be a shame.
“It’s a labor of love,” he said. “We love our cows. We love the farm. I love the ground. We don’t make much money at it, but it’s the way we live.”