‘Not for the faint of heart’

Dairy farms decline amid low prices, costly regulations

ALPENA — Working in agriculture is the survival of the fittest.

That’s what Janet Tolan, owner of Risky Endeavor Dairy, in Ossineke, has to say about operating an agricultural business in today’s market.

“It’s not for the faint of heart,” she said, adding that farmers have to be able to roll with the punches. “A lot of the commodities have been really low in price, which is great if you’re a dairy farmer and you’re buying the stuff, but terrible if you’re a cash crop farmer and selling it, because grain prices are so low, you’re not able to pay your bills.”

Tolan, like many other farmers across the state, has withstood years of low prices. In the dairy industry, Tolan said prices have been low for a decade, and that it’s the consistently low prices over a prolonged period of time that has really taken a toll on people.

The number of dairy farms in Alpena County has been on a downward trajectory for more than a decade. Here, the number of dairy farms decreased 35.3%, or by 18 farms, between 2007 and 2017, according to data from the U.S. Department of Agriculture’s 2017 Census of Agriculture.

The census found a slight increase in the number of dairy farms in Alcona and Presque Isle counties during that same timeframe, with the number of farms increasing to 11 farms from eight farms in Alcona and to 16 farms from 14 farms in Presque Isle.

Nine farms in Montmorency County were recorded by the agricultural census in 2012 and again in 2017. The county had two more dairy farms in 2017 than were recorded by the census in 2007.

Although there were four fewer dairy farms in Alpena County in 2017 than there were in 2012, the number of dairy cows in the region increased by 26%, or by 1,104 cows, in the same timeframe.

Christian Tollini, who will take over as the agricultural educator for the Michigan State University Extension Office in Presque Isle County in July, said that means the dairy industry in the county is beginning to consolidate. The low milk prices also mean that dairy producers need more cows to make up for the depressed market prices.

The number of farms raising cattle for beef have also been declining steadily in Alpena, Alcona, and Presque Isle counties. The 2017 Agricultural Census showed beef farms declined 27.9%, or by 31 farms, in Alpena County between 2012 and 2017.

Beef farms declined by 46%, or by 29 farms, in Alcona County and by 30.6%, or 26 farms, in Presque Isle County, between the 2012 and 2017 censuses. The number of beef farms in Montmorency County held steady at 46 farms from 2012 to 2017.

WEATHERING THE STORM

Tolan has been able to weather the storm by having money in reserves and really watching the farm’s expenses. She also feeds her cows a more affordable “haylage” diet and breeds her cows based on their butterfat and protein output, because the payment she will receive for the milk is based on volume of fat and protein.

But not every farm or farmer has been that fortunate.

Ken Nobis, senior policy director with the Michigan Milk Producers Association, said producers are going into their fifth year of “really poor prices.” He said the average break-even milk price for produces is $16 per hundred weight, or per 100 pounds of milk. But there have been many, many months over the past four years where there hasn’t been a $16 pay price, he said.

Nobis said many dairy farmers have been able to survive so long because they’ve been able to go to the bank and borrow against their equity. He said it’s gotten bad enough for some farmers that the banks will no longer lend them money.

“They’re running out of equity today. We have seen a fair number of people exit the industry,” he said. “I think, in 2019, we’re going to see even more leave.”

DEALING WITH TB

Additionally, Nobis said producers in Alpena, Alcona, Montmorency and Oscoda counties also have added operational costs related to bovine tuberculosis testing required by the Michigan Department of Agriculture and Rural Development and the federal government. That’s a cost other producers in the state don’t have.

Bovine TB is an infectious bacterial disease primarily affecting cattle, and is endemic in the white-tailed deer population in Alpena, Alcona, Montmorency and Oscoda counties.

Cattle producers in those counties are required to test their animals annually for bovine TB, according to Nancy Barr, TB program manager with MDARD. Producers are also required to test cattle before they are moved and they have to get a permit in order to move them.

Although MDARD and the USDA pay for the required annual testing, Nobis said it costs farmers time and money because, many times, they’re paying employees while the testing takes place.

He said it also costs producers when they go to sell their cows, because the value of the cattle are lower because they live within the areas affected by the disease. That limits where the cows can be shipped when they need to be culled.

Tollini said that, although the prices of beef cattle fluctuate, the market prices still remain at profitable levels. Yet he believes much of the decrease can be attributed to bovine TB.

“The TB issue — it’s always a cloud hanging over the cattle producer’s heads here,” he said. “You don’t know if you’re going to have your herd infected one day and then all of the investment you made is all of a sudden hanging in the balance and you don’t know if you may be able to keep going.”

He said a number of farmers, many of whom are older farmers, are choosing to get out of the industry altogether because they no longer want to deal with the regulation related to bovine TB.

FEWER FARMS, FEWER SUPPLIES

As the number of farms in the area continues to decrease, Tolan said one of the biggest concerns is that farmers are losing the ability to get supplies and be able to acquire the things needed to continue farming.

Tolan said her farm already is running into problems with their semen salesman, as the company that sells semen to the farm to breed the cows has reduced the number of salesmen to the area.

They have also received notification from one of their suppliers recently that they would no longer be coming up to the area and that the farm would need to find another supplier.

Tolan said that, as farms become fewer and fewer, farmers in the region run the risk that it won’t pay for a milk truck to come and pick up the milk if they are the only farm operating in the area. She said it hasn’t affected farmers in the area, yet, but it has affected other regions of northern Michigan.

“Once that agriculture is gone, it’s gone,” she said. “No one is going to wake up in the morning and decide, ‘Hey, I want to be a dairy farmer,’ because it’s just too costly to get into that field.”

Crystal Nelson can be reached at cnelson@thealpenanews.com or 989-358-5687.