Dairy farms drying up
Published 12:00 am Saturday, December 12, 2009
By Katie Scarvey
It was a day the Hoffner family hoped would never come. Pressured to the breaking point by an extended period of low milk prices this year, Lonnie Hoffner decided it was time to cut his losses.
In order to keep his Amity Hills Farm, he sold his herd of Jersey cows at auction.
All of his beloved Jersey cows ó except for family pet Belle ó were sold one by one Dec. 5. They were later loaded onto livestock trucks, headed for dairy farms around the country.
Hoffner says his problems began in 2004, when there was another huge drop in milk prices. When milk prices were slashed in half early in 2009, mostly as a result of a declining export market, he realized recovery was not possible.
Dairy farms have been disappearing in North Carolina for years. In 1987, according to the Census of Agriculture, that is done every five years, there were 65 farms with milk cows in Rowan County. In 2007, there were 22.
Now, at the end of 2009, only 13 milking dairies remain in Rowan County, according to extension agent Brad Johnson, with three producers raising dairy heifers for other dairies.
Statewide, the picture is similarly bleak for the family farm. In 1987, there were 2,336 farms with milk cows in North Carolina. In 2007, that number had dropped to 463 and is lower still today.
Dr. Brinton Hopkins is an extension dairy specialist with North Carolina State University.
“This past year has been the toughest year for dairy farmers financially that I’ve ever seen in my life,” he said.
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David Correll still farms in Woodleaf, but he got out of the dairy business about four years ago, selling his herd of 100, along with his milking equipment.
It was the end of an era, since Correll’s grandfather, Talton Correll, got in the dairy business in 1938.
“We were paying the bills,” Correll said, “but there wasn’t a lot left over.”
Simply covering expenses wasn’t enough, especially when he considered that he wouldn’t have the means to deal with any sort of major equipment breakdown.
Correll puts his own situation in the context of a larger downward trend.
“The diary business in Rowan County has been declining for years,” he says. “Hundreds of dairies were lost in the 1960s.”
In 2000, there were about 71,000 cows producing milk on North Carolina farms. At the beginning of 2009, that number had plummeted to 45,000.
Iredell County is the biggest milk producer in the state, with 11,700 cows as of January 2009. Despite its declines, Rowan County was ranked fifth in the state with 1,700 cows.
Milk prices were strong in 2008, with the average price per hundred pounds averaging $21.50. In the past year, however, milk prices have dropped precipitously.
“Prices over the last 12 months have been terrible,” Correll said. “Guys who are still in the business have had to borrow money to keep going.”
The market value of the livestock has also gone down, he says, making it even more difficult for farmers who decide to liquidate their assets.
Up until recently, Correll has kept a hand in the business, raising replacement dairy heifers, but even that venture has been a financial disappointment.
He sold a group of heifers this fall, but that was a wash.
“We basically got what we paid for them,” he says.
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When asked to describe the current state of the dairy business, Wayne Lutz says he can do it in two words.
Lutz owns a dairy farm in Mocksville, one of only three left in Davie County, he says. There used to be more than 100.
Lutz, who is president of the North Carolina Dairy Producers Association, says dairies all over the country are struggling.
The average farmer, he says, has lost between $100-150 per cow, per month, since Jan. 1 of this year.
At the end of last year, he explains, the price a farmer received for milk was slashed in half, from about $20 a hundred-weight to $10.
Wild fluctuations in milk prices aren’t a new thing for dairy farmers, but no one expected the depressed price to continue month after month in 2009.
Many farmers, including Lutz, have needed infusions of cash simply to stay in business, especially those losing in the five figures each month.
Lenders were agreeable because they thought the crisis wouldn’t last, says Lutz, who borrowed $100,000 with the goal of making it through the crisis.
Although milk prices have increased somewhat recently, he says, “there’s nothing to really change the overall situation
Corey Lutz, Wayne’s brother, is also in the dairy business. He owns Piedmont Jerseys in Lincolnton.
He believes that North Carolina’s regulations, including those concerning waste management, make it difficult for dairy producers to turn a profit.
In general, the dairy industry is seeing a trend toward “huge, massive farms,” he says.
Dairy farming on his own since 1997, he says that his grandmother was the first in his family to milk cows, in the early 1900s.
With 200 Jerseys, he is perhaps doing a better job than many of riding out the bad times.
“We do a lot of intensive grazing,” he says, which means that he spends less on feed than some farmers do. Although he’s not making money, he also hasn’t had to borrow to stay in business, as many farmers have.
Still, there’s a limit.
“I can’t continue this way,” he says.