In the 1960s, the Canadian government inaugurated a monthly quota system for its dairy farmers and today those farmers say that if it weren’t for the supply management system the dairy industry in Canada would not exist.
For Canadian consumers it comes at a cost. A gallon of milk there costs about double what it costs in the United States, where there is no management supply system. Another difference is that the dairy industry in Canada is stable, whereas in the states we’re losing dairy farms by the jug full.
And whereas Canadian consumers pay more for their milk than we do, grocery prices are about eight percent less than here.
Grocery pricing in general is a complex process, which involves taxes, tariffs, government support levels, etc. But for a state like Vermont, where the dairy industry is so pivotal to our economy, and its presence is such a part of our culture and our history, the takeaway is that the Canadians have figured out how to protect a vital industry and still keep the total grocery bill below ours, a neat little trick we need to try.
To our dairy farmers this isn’t news. Still, it’s immensely frustrating for them to watch as the demand for their product — thanks to the coronavirus — is up, and more and more people are talking about the need for “food security,” yet our dairy farmers struggle to make a living.
In Canada, there is a direct connection between farmers and the people who drink their milk. In the United States, that connection doesn’t really exist. Here, it’s all about price, which is America’s core value. Nothing else.
And it’s getting worse. In fact, it’s hard to see a way out for small dairy farmers. A Wall Street Journal story this week explained how Walmart, Kroger and Alberstsons have started their own milk bottling plants, the purpose being to lower the price of the product that lures most shoppers to their stores.
That pursuit, and the overall decline of consumers’ thirst for milk, has taken a dramatic toll on the number of Vermont farmers. We had 1,015 dairy farms in 2010, which dropped to 739 in 2018, and to 677 this past January. Nationally, the number of dairy farms has been cut in half since 2003 when we had 70,375 licensed dairy farms. Today, we have 34,187 farms. It’s easy to understand why: Over the past decade, the net income on the average dairy farm was negative every year except one. How do you go on?
The farms left standing are the large ones. As of 2017, farms with 2,500 cows made up just 1.3 percent of all dairy farms nationally, but they claimed 35.3 percent of the total value of milk production. And the consolidation continues, which puts more and more pressure on the family dairies.
The only way out is to follow our friends to the north. Without a long-term supply management program to balance supply and demand, the trail of destruction will continue and the people hurt most will be the smaller players, like our farmers in Vermont.
Vermont farmers have been talking about such a program for years. It never got any real traction because of opposition from larger operations in larger states, operations that could weather the ups and downs. That’s beginning to change, as the damage is hitting them as well. Finally.
It’s a cause in need of a leader. It can be done, and done affordably. Just look north at the farms that are freshly painted, where the creditors are few, and stability a given.
by Emerson Lynn