Low milk prices and a year of losses that featured fuel topping $4 per gallon have prompted Connecticut”™s dairy industry to seek legislative action to save what it says are thousands of jobs and perhaps more than $1 billion in economic activity.
“This decade has seen a rapid decline in the number of dairy farms in Connecticut,” said Don Tuller, president of the Connecticut Farm Bureau and a farm owner himself. “There has been a loss of 83 farms since 2000; 12 in just the past year.”
According to Tuller, since 2003 Connecticut dairy farmers have racked up more than $85 million in losses as the cost of milk production has outpaced the federally mandated price of milk.
“In the last 72 months, Connecticut dairy farmers have only seen nine months where the price of production was covered by the final sale price,” said Tuller. “To fill the gap, farmers have turned to credit, but with the recession and credit crunch and a forecasted $32 million Farm Bureau shortfall in 2009, we”™ve reached the tipping point.”
Tuller said because the government looks at milk prices on a national level, farmers in the Northeast are at a disadvantage due to higher costs of operation, fuel and feed than farms in the Midwest and elsewhere. California, as with many agricultural commodities, is the nation”™s leading dairy producer.
“The industry is following the same economic climate as the rest of the world,” said Craig Hartmann, director of plant and farm operations at Stew Leonard”™s. “The reason for the drop in the milk support price is they figure there are too many cows and too much milk.”
According to Hartmann, the market administrator sets the base price for all the milk markets across the country.
“We”™re in what”™s called Zone 1,” said Hartmann. “We ourselves being Stew Leonard”™s are able to support our farmers with a better rate than the base price. We”™re able to buy our milk direct from the farm.”
Stew Leonard”™s, headquartered in Danbury, buys its milk solely from Bahler Farms, a family-owned farm in Ellington.
“There are many farms that are going to suffer with this and there are many farms that are going to go out of business,” said Hartmann. “Milk prices go up and down just like stock prices.”
Tuller said that in February 2009 the price set by the government for a gallon of milk hovered around a dollar per gallon, though the average cost for a farmer in Connecticut to produce a gallon of milk was about $1.90 per gallon.
A January 2009 study by the Department of Economic and Community Development and the Connecticut Department of Agriculture said the impact of the Connecticut dairy industry is estimated to be between $832 million and $1.1 billion.
“The industry also creates upwards of 4,242 jobs in farming, transportation, heavy machinery, food production, manufacturing, construction and sales,” said Peter Orr, farmer at Fort Hill Farms in Thompson. “If the legislature does not take action this session, all of the revenue and jobs may be permanently lost.”
The dairy industry has asked that legislators work with farmers and other groups to come up with programs that give the farmers a safety net when the wholesale price of milk falls below the cost of production.
 “Almost three years ago, Gov. Rell called for the state to do everything in its power to retain and support the dairy industry,” said Benjamin Freund, farmer at Freund”™s Farm Family Dairy in East Canaan. “Action needs to be taken now because without state help this year, a significant number of our dairy farmers will not be around to produce milk in 2010.”
Hartmann said that famers have made attempts many times in the past to develop new legislation to generate more support for them through the state.
“As many times as they”™ve tried, it hasn”™t worked yet,” said Hartmann.
