[AT] Dairy farming. Dying industry?

[Grant Brians]

George, (and replying to Danny's later comment) I would have a different 
take on the situation. The Dairy Industry (notice the capitals) is not yet 
dying in this country if it is defined as the production of fluid milk by 
large Corporately owned dairies. The average size of a dairy built in 
California and Arizona in the last ten years is now about 10,000 cows 
milked. This is as compared to the average size of dairies in California 30 
years ago of about 300 cows. The dairies that are shutting down are of many 
size ranges here, but the common factor is that they are not willing or able 
to continue producing milk at a loss not a profit.
    In the first go around on this topic, the statement was made that the 
price of milk is tied to the price of cheese by federal law. This is true 
and is a major factor in the decrease in milk prices. Unlike the three 
previous periods of losses in the dairy industry in the last 30 years, this 
time the milk prices went down at the same time feed prices, energy and 
labor all increased in cost. Previously, there were oversupplies driven 
largely by domestic production or droughts etc. that increased feed prices. 
This time, depending on the authority, there is either not a domestic 
oversupply of fluid milk or the oversupply is very small and is driven by 
changes in milk processing and sourcing. That is a complicated way of saying 
that there is not excess domestic production, but there is a dramatic 
increase in imports. Are these imports subsidized? Basically yes. The 
discussion on how even the Argentine imports are subsidized coming here is 
outside the scope of this email and is very long and complex so I won't 
elaborate right now.
        Now, here is the obvious question.... If all or nearly all dairies 
are sustaining losses from milk production in the US right now, why would 
there be further huge dairies in the planning???? Several reasons. First, 
some large dairy operations are counting on the smaller, less well funded 
operations going out of business quickly enough that the prices will 
increase soon. Second, the large dairy operations being developed are nearly 
all being developed with money from selling other operations and they do not 
wish to pay capital gains taxes on the properties they sold (this is the 
case in the movement of dairies from Chino Valley and other near Los Angeles 
locations to California's Cental Valley, Arizona and New Mexico.) Third, the 
operations not being funded by reason number two are being funded by 
Europeans who have extra cash and see the day coming when milk prices will 
increase back to profits due to lowered subsidies for the products imported 
to the US. Fourth, a very large dairy in most areas is not going to have to 
cover the full community costs of the pollution and other impacts they 
create, so they have a hidden subsidy there. Fifth, the US tax code and Farm 
Bill favors "Corporate Farms" in a variety of ways that make it easier to 
ride out a prolonged slump in milk prices at this time.
    The flip side of this change in the industry, is that IF these corporate 
players bet wrong, they will not reap profits soon enough to have both 
reduced the competition from the smaller dairies and also survive. In either 
case the US taxpayers will have subsidized the transition to larger, 
inherently more pollution creating dairies and will then have fewer families 
farming and living in the truly rural parts of the country, leading to even 
less community in the rural areas.
    So here is the question for the list and really the country - should we 
subsidize this transition and pushing the smaller farmers out of business or 
not? And if not, how do we change to rules to level the field for the 
smaller farmers like those who bought nearly all of the tractors this list 
likes to restore/use....
    Note none of what I have said is political, it is explanatory and asking 
what do we as Americans (or in Ralph and others cases, as residents of their 
countries) want to have our world look like? I wish I could influence things 
more (especially since I am a full time farmer, but I cannot do much on the 
subject other than educate.
    Also, please note I am a Vegetable farmer not a dairyman, so I am not 
going to directly benefit from higher farmgate milk prices.
        Grant Brians
        Hollister, California
----- Original Message ----- 
From: "George Willer" <gwill at gwill.net>
To: "'Antique tractor email discussion group'" 
<at at lists.antique-tractor.com>
Sent: Thursday, March 01, 2007 7:35 PM
Subject: Re: [AT] Dairy farming. Dying industry?


> The locals are pretty excited about a couple new dairy operations in our
> county.  Each operations is intended to have around 2000 head.  Maybe
> expenses go down dramatically with scale?  Both operations will be within 
> a
> few miles of each others unless the NIMBYs have their way. (unlikely). 
> Both
> are proposed by people coming from Holland.
>
> It doesn't sound like the industry is dying here... just changing form.
>
> George Willer
>
>> -----Original Message-----
>> From: at-bounces at lists.antique-tractor.com [mailto:at-
>> bounces at lists.antique-tractor.com] On Behalf Of CEE VILL
>> Sent: Sunday, February 25, 2007 11:30 AM
>> To: at at lists.antique-tractor.com
>> Subject: [AT] Dairy farming. Dying industry?
>>
>> With the list being pretty quiet, it seems a good time to toss in this
>> article from a Pa. newspaper which I read yesterday.  Sad but interesting
>> read if you are interested.
>>
>> Charlie V.
>>
>> P.S.   (tractor ref.) These guys use a lot of tractors.  Fodder for 
>> future
>> collectors.
>
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