Loss of dairy farms costs region $100 million a year, says local expert

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For decades, small dairy farms have been disappearing from the rural upstate New York landscape, as rising costs outpace milk prices and farmers struggle to stay in business.

Last week, in a column published in the Chenango Evening Sun, a local dairy expert claimed that the dairy drain is costing the Chenango, Otsego and Delaware County region over $100 million a year in lost economic impact.

In the article, Kenneth Smith, executive director of the Chenango County Cornell Cooperative Extension, takes a look at recent USDA data on milk production, and concludes that the loss of hundreds of dairy farms from the region since 1999 has taken a grave toll on the local economy:

In Chenango County alone, the loss of over 100 dairy farms since 1999 is costing the county more than $30 million per year. In 1999, approximately 285 dairy farms in Chenango County produced 350.7 million pounds of milk. Twelve years later in 2010, after losing more than 100 dairy farms, Chenango County produced only 246 million pounds of milk. The 2012 value of the lost milk production alone was over $20.3 million, but there is an even greater loss of $33.9 million in overall economic impact (the impact of money dairy farmers spend in the community on things like labor, fuel and equipment, and which is then re-spent in the community).

Like Chenango, neighboring Otsego and Delaware counties have also experienced large declines in dairy economic impact due to falling milk production. Otsego County has lost $42.4 million in annual economic impact (based on 2012 milk prices) resulting from a decline of 131 million pounds of annual milk production compared to 1999. Delaware County has lost $35.3 million in annual economic impact resulting from a decline of 109 million pounds of milk per year compared to 1999.

Smith writes that Chenango, Otsego and Delaware Counties, where dairy farms tend to be small because of the hilly landscape, are losing dairy production faster than any other counties in the state, although the dairy decline is widespread.

But he thinks a turnaround is possible, if New York State gets serious about supporting its small dairy farmers:

As challenging as the past decade or so has been for dairy farming in places like Chenango County, there is evidence that a turn-around is possible. Studies by Cornell and by Farm Credit (the leading agricultural lender in our region) show that smaller dairy farms can be profitable in our region, particularly dairies that graze their cows. Wisconsin, which suffered similar problems with declining milk production, turned its milk production around in 2004 with a dairy strategic plan that supported growth of all sizes of dairy farms.

An effort to draft a New York State strategic plan for dairy is underway in the region, WBNG reported last fall.

The irony of the state's dairy problems is not lost on dairy advocates, who note that local yogurt manufacturer Chobani, which has achieved meteoric growth and success over the last few years, is having trouble buying enough milk in the region to keep up with production at its New Berlin factory.