Vision 2019 | Local farmers ‘hang on’ in challenging, unpredictable industry

Patton farmer Marty Yahner (left) and his wife, Chris, chat with Zippy Duvall, American Farm Bureau Federation president, during the federation's annual meeting in January in New Orleans.

Glenn Stoltzfus has watched as other farmers sell their animals, equipment and acreage to leave the industry. 

“It’s been a real struggle,” he said. “We’ve been able to hang on.” 

Stoltzfus operates Pennwood Farms just south of Berlin with his brothers. The operation has more than 1,300 acres and more than 600 cows, which require milking three times per day. 

For the past decade, the farm has been part of a co-op that markets milk and seeks the best prices for its products. 

With an ongoing decline in milk prices, Stoltzfus said Pennwood Farms was hopeful for higher crop sales this summer. 

But a rainy weather pattern ruined that plan for many farmers, he said. 

“We’ve never had a worse year as far as crops go,” he said, meaning he and his brothers may have to consider selling off some livestock or buying feed to bridge the gap. 

Patton farmer Marty Yahner said many crops were harvested extremely late as farmers waited to dodge downpours. 

But leaving crops in the field longer means more exposure to weather and wildlife.

Some farmers don’t have grain drying equipment as Yahner does, and weren’t able to salvage much of their already thin harvests. 

Yahner said the demand for straw is “through the roof” because many farmers weren’t able to produce enough to provide for their own livestock bedding, let alone sell it. 

The effects of that weather is “carrying over into the next year,” Yahner said, with some farmers not planting winter wheat typically started in September or October and harvested in the winter months because their fields never dried out. 

Carissa Itle Westrick, director of business development for Vale Wood Farms in Loretto, said some farmers may be having a hard time justifying costly improvements – instead leaving the industry, which means less milk in the supply chain. 

“It seems like the price eventually has to respond,” she said. 

Milk fat and pricing

According to numbers compiled by Westrick, the state’s minimum milk price paid out of store by consumers increased in 2014, but has returned to 2012 rates. 

In May 2012, the minimum milk price paid out of store by consumers was $1.92 per half gallon of whole milk. That price increased to $2.26 in 2014, dropped to $1.84 in 2016 and was $1.92 in May of 2018. 

Prices for 2 percent milk had a similar pattern, going from a $1.85 minimum for a half gallon in May 2012 to $2.16 in 2014, $1.73 in 2016 and $1.79 in May 2018. 

Milk prices, which are set by the state, are affected by national trade factors. 

Using the milk from about 500 cows, Vale Wood Farms is enrolled in a federal policy that adds protection for dairy operations, similar to crop insurance. 

Although that has helped, costs to keep employees continue to increase as milk prices are on the decline, local farmers said. Vale Wood Farms typically invests two years in calves before they begin producing milk, Westrick said, and the decision about whether to add more cows to the herd is becoming tougher. 

Dairy farmers have also been hit by the reduction of milk fats in school lunch programs, which went into effect in 2010 in law supported by former first lady Michelle Obama in an effort to make student meals healthier. 

Westrick said that becomes a policy versus price issue, with milk prices based on the amount of milk fat content. 

The recently introduced Whole Milk for Healthy Kids Act of 2019 would allow for flavored and unflavored whole milk in schools. 

Support for that legislation has been led by U.S. Rep. Glenn “G.T.” Thompson, whose 15th Congressional District includes part of Cambria County, along with Collin Peterson, a Democrat from Minnesota who is also chairman of the House Agriculture Committee. 

U.S. Rep. John Joyce from the 13th Congressional District has signed on as an original co-sponsor. 

Impact of alternatives

Surprisingly, both Westrick and Stoltzfus said whole milk sales have increased. 

“That certainly helps,” Stoltzfus said. “We’ve kind of created a generation of people who don’t drink milk. That has hurt us, there’s no doubt about it.”

People are buying more local products, Westrick said, and doing more research when it comes to diet. 

“I think people may be reverting to eating foods as nature intended,” said Westrick, the business development for Vale Wood Farms. “They can make that decision (to support local business) at the grocery store.” 

With increased popularity of almond, soy and coconut alternatives, Stoltzfus said there have been years of decreasing whole milk sales, but the market has rebounded to stabilize and even increase slightly in the last year or so. 

Stoltzfus said he’s supportive of an initiative to urge the FDA to change labeling requirements for plant-based beverages, meaning the term “milk” can only be used for products that come from a lactating mammal. 

Westrick said she’s received calls from people who are confused about why Vale Wood Farms doesn’t produce an almond flavored milk, not realizing that it’s not the same thing as “almond milk.” 

However, having a smaller processing plant does allow Vale Wood Farms to get creative and be flexible to try out smaller batches of products – including yogurt smoothies and two varieties of flavored butter, garlic herb and brown sugar cinnamon. 

‘Law of economics’

Beyond declining milk prices and weather-related crop losses, Yahner said farmers have become their own worst enemies as they become more efficient and productive.

As the trend of fewer and larger farms continues, 98 percent of U.S. farms are still family owned or controlled, Yahner said. But as with other business sectors, larger corporations typically see profits or losses on a larger scale.

“That’s just the law of economics,” he said. “Agriculture is no different.”

Farmers are also facing hikes in interest rates, adding to existing debt they may have for operating loans, equipment or mortgages, Yahner said. 

As a result, he said, some feed mills are no longer offering credit for customers and requiring cash up front.

Yahner said he is optimistic that a five-year, $867 billion federal farm bill passed this year – on time for the first time in decades – focuses on reduced regulations, tax breaks and risk-management help farmers need.

“It gives certainty to an uncertain business in agriculture,” Yahner said.

“It gives us some stability,” Stoltzfus added.  “We know what to expect.”

​Jocelyn Brumbaugh is a reporter for the Tribune-Democrat. Follow her on Twitter @JBrumbaughTD.

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