Their numbers have dropped dramatically since the 1940s, but the 147 dairy farms left in Connecticut contribute close to $1 billion to the local economy and help preserve more than 70,000 acres of green space.
But even with the $14 million they’ve received under the Community Investment Act legislation passed in 2009 dairy farmers are still struggling to pay the bills. And even though the grant, created by a $10 increase in local land record fees, doesn’t run out until July 1, 2011, dairy farmers are already starting to worry.
“Dairy is such an important part of the agricultural base,” Ben Freund, co-owner of Freund’s Farm in East Canaan, said last week in a phone interview. “We’d like to see the removal of the sunset provision.”
The call to extend the grant programs comes on the heels of a University of Connecticut report that found the agricultural industry contributes up to $3.5 billion a year to the state economy.
“Despite the fact that the legislation called for dairy farmers to receive eight quarterly payments over the 2-year period, it hasn’t quite worked out that way,” said Steve Reviczky, executive director of the Connecticut Farm Bureau Association. “An initial emergency aid payment was made followed up by two additional quarterly payments. But because of the state budget deficit, the legislature and administration took funds out of the Community Investment Act, eliminating one quarterly payment and severely reducing scheduled quarterly payments for this entire fiscal year. So while it was great that the state passed this legislation, the reality is the safety net is not living up to its legislative intent.”
F. Philip Prelli, Commissioner of the Department of Agriculture, said last week that one quarterly payment was skipped after the funds were swept by the legislature and future quarterly payments, which are paid to farms based on milk production, will be lowered.
“It’s a federal issue,” Prelli said. “Determining the milk order is currently being driven by Class III milk.” Class III milk is used to produce cheese.
Initially, dairy farmers thought the two years would help buy them time to change how the federal government sets the price of milk, but changes to the formula don’t appear likely, Freund said.
Under government mandated wholesale milk prices, Connecticut dairy farmers are currently losing nearly 50 cents for every gallon of milk that they sell. They had been losing a $1 per gallon when the legislation was passed and because of the financial hardship, the state lost 15 dairy farms from 2008 to 2009 as farmers struggled to pay the bills.
The price dairy farmers are able to fetch for their milk currently is up slightly, but Peter Orr, owner of Fort Hill Farms in Thompson, said he worries about the increasing price of corn.
“It’s getting expensive to feed the cows with corn trading so high,” Orr said last week in a phone interview.
The gap between the price of milk and the cost of production continues to grow for dairy farmers like Orr and Freund. And as the gap increases they continue to lose equity in their farms.
“The dairy industry requires farmers to operate with a long term outlook. You plant a crop of corn and invest in young animals and it often takes more than two years to get any payback,” said Freund. “The fact that the state has only been able to fund one-third of its promised funding so far makes it very confusing and difficult to make it through the seasons. You can’t make a plan or build a business if you don’t have the right tools to make it work and not knowing what your revenue stream will be makes it extremely difficult.”
“The mixed signals we have been getting from the state makes us wonder about the commitment for dairy’s long term survival in Connecticut,” Freund said.
A report released last week by the University of Connecticut that found agricultural sales in the state were more than $3 billion in 2007, higher than the $2 billion that policymakers had thought was good news. However, the strength of the agricultural base including the vendors, local contractors and other infrastructure, would begin to disappear without the dairy farms, Freund said.
“A lot of what farmers provide is not in a gallon of milk, but the open space we preserve,” Orr said. “There’s a lot of non-pecuniary value in our farms.”
Connecticut lost just two farms in the past year, while New York lost over 96 dairy farms and Vermont lost 70, Reviczky said. Neither of those states enacted programs similar to Connecticut’s.