Investigations

Why Pennsylvania milk profits are being skimmed

HARRISBURG, Pa. (WHTM) - The dairy industry is mother's milk to Pennsylvania's economy, generating $15 billion and an estimated 52,000 jobs.

But for several years, the bottom line's gone sour for the men and women who are producing the milk.

If there is an easy way to make a living, dairy farming most certainly is not it.

"These are animals you have to worry about on hot days and on cold days and seven days a week," said Pennsylvania Agriculture Secretary Russell Redding, who grew up on a dairy farm in Adams County and owned one in the 1980's and 90's.

The cows need food and water twice a day. They are milked, typically, three times a day. It is labor intensive, and for most farmers, a labor of love. But the depths of their affection is being severely tested.

"I worry as much now about dairy as I did when we had our cows," Redding said.

The concern is not about milk production. The glass is half full there.

Commonwealth cows' 10.9 billion pounds of milk per year is seventh in the nation behind California, Wisconsin, New York, Idaho, Texas, and Michigan.

The state's 6,570 dairy farms are second only to Wisconsin.

Lebanon County's Reid Hoover owns one of them.

"I grew up on this farm," Hoover said, proud that he's spent nearly all of his 58 years in the business.

The problem, he says, is price.

"I'd be lying if I said I wasn't frustrated," Hoover admitted.

In 2014, farmers got $25 for every hundred pounds of milk they produced.

In 2018, a hundred pounds fetches about $15.80.

What does Reid need to break even?

"It ought to be in the $17's, about $17.50," he said with a laugh.

It was a nervous laugh. He knows that since 2015, 200 dairy farms have shut down in Pennsylvania. Families, understandably, got tired of doing all that hard work only to lose money. Reid says milk prices have always fluctuated but this time it's different.

"It just seems that right now the downs are a little longer and a little lower than they were in the past," Reid said. The current dip has lasted more than three years.

Pennsylvania dairy farmers may be too good, the supply too plentiful, leading to prices that are too low. The principles of supply and demand are working against them.

"We're concerned for the local dairy farmers because there is just an overproduction of milk in Pennsylvania," said grocery store owner Scott Karns. "We need more milk drinkers."

Karns adds that consumer tastes have changed. His dairy case now shares space with products mostly unheard of a decade ago.

"There has been what they call leakage over to organics, the lactose-free, soy milks and nut milks," Karns said

Another trend is survival of the biggest. The larger the farm, the more easily it can employ economies of scale and weather economic downturns.

That may be Pennsylvania's Achilles hoof. The state's average farm is 80 cows, which ranks it 50th in the United States in terms of herd size.

Reid has expanded through the years and now has 350 cows. He suspects farms will get bigger, or they'll be gone.

"It's gonna look different a couple years down the road. There's gonna be less of us and I don't like that, but I think it's a fact of life," Reid said.

Dairy farms have always been hard work. But the hardest job now for the people that run them is survival.

"These are generational operations," said Redding. "These are folks who worked their whole life to build a business and the economics are running against them, and that's a sad day."

One of Pennsylvania's problems is self-inflicted. Fluid milk consumption is on the decline while demand for cheeses and yogurts soars.

There are not enough cheese and yogurt processors, Redding said. The cost of sending milk elsewhere for processing eats into a farmer's profits.

But Reid has a very simple answer when I ask how average workaday Pennsylvanians can help the hard-working dairy farmers in the commonwealth.

"Drink more milk," he said with a laugh.


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