UNITY, Maine — After a week listening to Maine dairy sector pleas to soften the blow of skyrocketing costs of production, the State Legislature’s Committee on Appropriations and Financial Affairs (AFA) rejected an urgent $1M emergency relief proposal from the Agriculture, Conservation and Forestry (ACF) Committee. The funds would have provided critically needed financial support to dairy farmers who are weathering a storm of skyrocketing grain and energy costs, a diminishing labor pool, disrupted supply chains from international conflict and lingering effects of the Covid-19 pandemic, and recurring drought during recent growing seasons. Instead, the AFA endorsed a modest line item of $50,000 to conduct a study on the cost of production to assess what adjustments need to be made to Maine’s Dairy Stabilization Program (commonly referred to as the Tier Program).
“Maine dairy farms are in crisis and need help now. Many producers haven’t folded yet, but because of cost of production and pay price they are no longer able to afford to feed grain, which then lowers milk production and ultimately income,” said Sarah Alexander, executive director of the Maine Organic Farmers and Gardeners Association (MOFGA). “The study that the legislature endorsed could bring increased support for dairy farmers but not until June of 2024 at the earliest.”
Maine’s Tier Program is an innovative approach to helping dairy farmers stay in business. It provides payments to dairy farms when their milk payments fall below cost of production rates that are defined in statute. Maine has a longstanding commitment to the program, recognizing that its “dairy industry is essential to the State’s rural economy, and generates business activity and preserves open space.” Maine law establishes that “the stabilization of the dairy industry during temporary price drops constitutes a public purpose and an appropriate expenditure of state revenues.” Farmers have not received Tier Program payments in the past 13 months because milk payment prices have exceeded outdated cost of production rates set in statute.
At a legislative work session on January 30, members of the ACF recommended the appropriation of $1M as a reasonable and much needed benefit to be shared among Maine’s dairy farmers who have not received Tier Program payments in more than a year. Maine Milk Commission executive director Julie Marie Bickford notified the ACF that she was prepared to facilitate distribution of emergency relief checks to Maine dairy farms without additional administrative costs as long as the AFA would approve the request.
Since 2017, Maine has lost 122 dairy farms and Maine’s Milk Commission recently reported to the ACF that many more dairy farms are perilously close to going out of business.
“Maine dairy farms sit at the heart of all Maine agriculture,” said Alexander. “Farmers of all sizes and management practices benefit from dairy farms dispersed through rural Maine as they drive the agricultural economy, supporting farm stores, equipment dealers, veterinarians, and many other services essential to the food and agriculture system. The loss of any dairy farm, large or small, organic or conventional, has a serious adverse impact on neighboring farms.”
Organic farms have been particularly hard hit by the escalating costs of production. Prices for organic soybeans in the United States rose to $40.52 per bushel in May 2022, up nearly 110% from January 2021’s $19.37 per bushel. Today organic soybean prices are still between $24 – $26 per bushel. During that same timeframe, conventional soybean prices ranged between $13 and $17 per bushel, and now are $15 per bushel.
“Organic dairy farmers are having to max out lines of credit to feed their cows, cut back on feed rations and make painful exits from production,” said MOFGA’s Organic Dairy and Livestock Specialist Jacki Martinez Perkins. “Organic dairy farmers and their families are under tremendous stress and the impacts of this crisis ripple throughout Maine’s local food supply.”
As of year end 2022, Maine had 54 organic dairy farms that shipped 42 million pounds of milk out of state to be processed. The average herd size of organic dairy farms in Maine is small – roughly 60 cows. Such small farms often are excluded from funding opportunities or aid packages as in the case of recently announced dairy relief from the US Department of Agriculture (USDA).
“The Agency’s Pandemic Market Volatility Assistance Program (PMVAP) is not going to help organic dairies in Maine because it doesn’t apply to the smaller scale of our certified dairies,” said Martinez Perkins. “Another USDA program, the Organic Dairy Marketing Assistance Program (ODMAP), is geared toward offsetting marketing costs and, as most organic dairies in Maine wholesale their milk, they don’t have many direct expenses for marketing.”
The Tier Program has helped slow the loss of Maine’s dairy farms, however, the most recent increase in production costs without tier price leaves dairy farmers making tough decisions about continuing in business at all.
“There isn’t a dairy farm in the state that has not been affected by rapidly rising costs,” said Annie Watson who owns Sheepscot Valley Farm with her family in Whitefield, and also serves as president of the Maine Dairy Industry Association. “Interest rates and electricity alone have made a difficult financial position even more precarious for the farms we have left. This is not a situation that should be taken lightly – we cannot stress enough how important every single dairy farm is to our agricultural infrastructure. The possibility of a farm ever coming back into production after selling out is incredibly unlikely due to high capital costs. I urge our state to do whatever it can to support our farms in this crucial time of economic challenge. These farms are economic engines for our rural communities, and every dollar that comes into a dairy farm goes right back out into the local economy to support businesses that support the greater off-farm community.”
The Maine Legislature has the ability to allocate emergency relief funding for dairy farms as it works through the biennial budget. If this happens, relief funding could be available to farmers when the legislative session wraps up in June.
The Maine Organic Farmers and Gardeners Association (MOFGA), formed in 1971, is the oldest and largest state organic organization in the country and is creating a food system that is healthy and fair for all of us. Through education, training and advocacy, MOFGA is helping farmers thrive, making more local, organic food available and building sustainable communities. More at mofga.org.
–Maine Organic Farmers and Gardeners Association