Sour Milk Market Ruining Farms

by Free Speech on August 31, 2009

Lodi, WI~

Lodi Valley News serving Lodi, WI & the Lake Wisconsin area with local information since Earth Day 2008.

Lodi, WI
8/31/09
by Ken Leiviska/ReedsburgTimes-Press

LOGANVILLE — No matter how hard he works, local organic farmer Ralph Reeson and his family are losing money every day. Because of it, his lifelong dream of making a living as a farmer might end after only eight years.

Reeson is just one dairy farmer of thousands in Wisconsin and the U.S. who can’t make ends meet with today’s milk prices. Since late 2008, the price to produce the milk is far outweighing what farmers are getting paid for every one hundred pounds — hundredweight. Farmers are losing money to stay in business.

“Prices are horrible,” said Reeson, who worked as a concrete finisher for years prior to becoming a full-time farmer. “They’re saying we’re losing about $100 per cow every month.”

He said he hadn’t run the numbers exactly, but that it means the 25 cows on his 40-acre farm just south of Loganville are costing Reeson about $2,500 a month. Pat Skogen, Reeson’s wife, said losing money just makes him work that much harder.

“He’s one of those guys who thinks if he puts his head down and works hard that things will get better,” Skogen, a special education teacher for 27 years and mother of three, said. Unfortunately, the situation is so dire that it doesn’t matter if Reeson keeps working 12- to 20-hour days like he has, she added.

“In reality, there’s nothing we can do,” Skogen said.

Darrell Myers, the fourth generation to operate his family farm — now incorporated — north of Loganville, agreed. As operational costs remain the same, dairy farmers are getting less and less money for their product, he said.

“When it costs you $15 to $16 to produce and you’re getting paid $10 per hundredweight, you’re losing about $5 per hundredweight,” Myers said. Based on a rough calculation, Myers said he lost over $7,000 in a month for his 80 cows.

What most people don’t realize, Myers said, is that not all the money they spend on milk goes to the producer. In fact, he said it is approximately 23 percent. Meaning for a $3 gallon of milk, the farmer only gets 69 cents.

Skogen and Reeson point out that as price per hundredweight dipped below $10 last month, other costs are staying the same. The price for hay and feed for the animals is not dropping and neither are machine costs and repairs, they said.

“We don’t have $100 expenses. We have $500 and $1,000 expenses,” Skogen said. She added that they had repairs done to a tractor, but can’t pay the mechanic the bill to get it back.

Myers shared a similar story. Although his personal life has remained virtually the same, unlike Reeson and Skogen, he has had to make quite a few cutbacks around the farm.

“Ideally you like to repair things or purchase one or two new things each year,” Myers said. “That’s out. We’re lucky if we can keep everything maintained and running.”

As milk prices continue to fluctuate, Myers said every month is a guess on what he can budget.

“I don’t go to Ho-Chunk (Casino), but I’m gambling every day,” he said.

The current dairy crisis has been especially brutal for Reeson and Skogen. It took five years, lots of hard work and even more money to become a certified organic farm, a cause Reeson believes in to his core. They also went organic, meaning all the cows receive hay and feed that were never treated with chemicals, for longterm financial reasons.

“We weren’t making it,” Skogen confessed about the farm they started in 2001. She said the hundredweight price for organic milk was closer to $28, which was much higher than conventional milk was and is getting.

However, faster than it took them to become organic, their processor said organic products weren’t selling as well and could only buy 30 percent of their milk at organic price and the remaining 70 at the conventional price. Even though Reeson and Skogen are paying organic farm prices, they are receiving mostly conventional prices.

“You can’t make money with that,” Reeson said. “You can’t even break even.”

They had to find something else to keep them afloat. Farmers markets in Reedsburg, Baraboo, Portage and Wisconsin Dells have become an essential part of life for Reeson and Skogen, who sell all kinds of vegetables and some meats at such events.

“That’s the money we use for groceries and to put gas in the car,” Skogen said, adding that farmers markets truly are supporting local farms and keep them running.

Reeson said they had to start selling vegetables and other foods at the markets to keep their farm running. “You’ve got to be really diverse to keep going,” he said.

Once started, they almost don’t have a choice when it comes to running their farms. Reeson and Myers both said they have to keep operating because of the “equipment” they use — cows — and the perishable product they produce — milk.

“We have animals here where we can’t just pull off the pump,” Myers said. “We are taking care of animals. We’re not just running a business.”

Myers said it is important for farmers to make money because they are some of the biggest economic stimulators this side of a government bailout.

“What happens out here impacts what happens in town,” he said. “When we don’t have money, we don’t buy new trucks, we don’t buy more feed and some stop even paying their insurance.”

“You go back 15 months ago when milk was record highs. We were making a lot of money. But where did it go? Back into the community buying trucks and going on vacations.”

Even though they’re losing money right now, Reeson and Myers plan on farming as long as they can.

“Most of us care enough where we don’t want to give up. We’d like to hang on,” Myers said. “That’s the question a lot of us are asking. At what point do I give up?”

Reeson said he’ll keep farming and milking as long as he can, but admitted, “It might not be very much longer.”

{ 1 comment… read it below or add one }

1 Thankful August 31, 2009 at 4:02 PM

THANK-YOU for caring about health and the environment by farming organically!
I think the organic markets are still growing and I would urge you to explore more on how you might be able to get premium price for all your organic milk.
It is certainly a shame to get paid less for a quality product.
Good luck.

Previous post:

Next post: