Farmers Seek Financial Help As COVID-19 Piles New Pressure On An Already Stressed Industry
This has been a cruel spring for Vermont’s dairy farmers. Going into March, farmers were encouraged: milk prices were finally on the rise after five years of decline. Then the coronavirus hit.
Restaurants and schools closed. Demand for milk crashed and farmers saw their pay plummet even as they were forced to dump surplus milk.
The state and federal government have financial assistance in the works, but it’s not clear when farmers will see the money.
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Holland dairy farmer John Morin said he needs help soon. I reached him in the cab of his tractor while he was working in fields close to the Canadian border.
“I’m doing fence right now. The manure’s pretty much done,” he said. “But most people will tell you that they don’t mind working seven days a week. The thing is that we’re not getting paid. When you get up every morning and you know you’re losing money, that gets old.”
"When you get up every morning and you know you know you're losing money. That gets old." - Holland dairy farmer John Morin
Morin’s farm is relatively small, with 150 cows. But his co-op, Kansas-based Dairy Farmers of America, recently ordered all its member farms, large and small, to cut production by 15%. That put another dent in Morin’s already shaky finances.
“For me, right now, it’s like $16,000 a month I’m going to be down,” he said.
Across the state in Sheldon, Green Mountain Dairy Farm is at the opposite end of the of size scale. Owners Bill and Brian Rowell have about 900 milkers. They run a high-tech operation with a manure digester to make electricity and crop fields spread out over miles of Franklin County. But the Rowells are in the same financial predicament as Morin - just with bigger numbers.
"If you look at our milk check, we're about $7 per hundredweight below where we were when this thing started. And that leaves us short for the month about $170,000." - Sheldon farmer Bill Rowell
Rowell explained that milk prices are set under a complex federal system that pays farmers for each 100 pounds of milk they sell.
“If you look at our milk check, we’re about $7 per hundredweight below where we were when this thing started,” he said. “And that leaves us short for the month about $170,000.”
Rowell spoke last week at a virtual meeting of the Senate Agriculture Committee. The panel has drafted legislation that would set aside $8.8 million dollars of emergency assistance for dairy farmers. Payments to farms would be based on herd size, with large farms like Rowell's getting $50,000. Medium farms would get $22,500 and certified small farms would see $12,500.
Rowell is a successful farmer and a frequent spokesman for the industry. He often cites farming’s importance to the state, noting the $2.2 billion Vermont dairy farmers pump into the economy each year. But he sounded a bit desperate as he pleaded for lawmakers to throw dairy a lifeline soon.
“I don’t mean to hurry you folks,” he said. “I know you’re doing good work and you’re being deliberative. But you going to be a lot longer doing this before we see some money?”
The committee chairman, Essex Orleans Senator Bobby Starr, said he’s waiting for the Scott Administration to definitely support the bill, or come up with its own plan to help dairy.
“They keep dragging on us… and they won’t give us any numbers,” he said. “And our bill should be pretty well done by the end of this week.”
Agriculture Secretary Anson Tebbetts said in a prepared statement that the administration will include dairy in its economic relief package to be released Wednesday. Tebbetts did not provide details, and said he looks forward to working with the legislature on the plan.
Dairy farmers are also waiting for the federal government to come through with a promised $2.9 billion aid package. It’s designed to cover 85% of COVID-19 related losses, from early spring through mid-April, and 30% of losses from mid-April onward.
But Diane Bothfeld, operations manager at the state agriculture agency, said the federal checks probably won’t be mailed soon. The USDA held a webinar last week on the program, but officials did not give a firm timeline, she said.
"There's some expectation that [federal aid will arrive] potentially in June, but when in June is a big question... There's no real specifics on when that would come out yet." - Diane Bothfeld, Vermont agency of agriculture
“This webinar was about how to get your name in and get started, not what the program would pay or not when checks were expected, or any of those things. So that created some general frustration,” she said. “There’s some expectation that [this will come through] potentially in June, but when in June is a big question for the federal programs. There’s no real specifics on when that would come out yet.”
Bothfeld said milk prices are expected to fall even more in June. She says for a farm milking 50 cows, the decline could mean a $35,000 drop in monthly income.
“Just gone. You don’t have it anymore. So that’s difficult,” she said. “How would you budget? How would you budget if your salary went down $35,000 in a months’ time?”
That’s even worse than what Holland farmer John Morin faces now. He said his $17,000 monthly loss has put him close the edge and keeps him up at night. His bank has suspended loan payments for three months, while feed and equipment dealers are also extending credit terms. But Morin said that can’t last. If things don’t change, many small farms will fold by the end of the summer, he said.
“It’s dire. You know, I go to bed at night, and I’m always stressing about how I’m going to pay my bills. It’s the worst I’ve seen it.”
Compounding the stress, Morin said, is that it’s hard to know when the crisis will be over, and if – or when – milk prices will improve. The uncertainty, Morin said, is the hardest thing of all.
Have questions, comments or tips? Send us a message or get in touch with reporter John Dillon @VPRDillon.
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