“The forecast is that things will improve slightly,” said Kirk Shoen, a resource educator at Cornell Cooperative Extension in Saratoga County. “Depending on your source, that may be a little to a couple of dollars” per hundredweight of milk.
“The dairy economy is quite cyclical,” said Jeff King, co-owner of Kings Ransom Farm in Schuylerville. Feed, especially corn and soybeans, is a big expense for dairy farms, he said. “Those prices look stable. Margins should improve. We need some years of positive margins.”
Unlike most other businesses, dairy farmers usually can’t set the price for their product. Milk pricing “is extremely complicated,” Shoen said, as dairy products are increasingly traded on the global market.
“There’s a lot of milk on the market right now,” said Tricia Lockwood, president of the Washington County Farm Bureau. “It needs either a reduction in supply or growth in demand. People are shifting away from fluid milk. They’re eating more cheese and yogurt, but not enough to offset the drop in fluid milk.”
Dairy farming is an important industry in Washington and Saratoga counties. Washington County had 140 dairy farms and 22,366 milk cows in 2012, according to the most recent data from the National Agricultural Statistics Service. Saratoga County has 25 dairy farms and 8,300 dairy cows, according to the Saratoga County Cornell Cooperative Extension website.
“The numbers are constantly changing,” said Aaron Gabriel, soils and crops educator with Cornell Cooperative Education in Washington County. “Because of the economies of scale, farms tend to get bigger. It’s one way to survive economically.”
Farmers are taking advantage of progress in technology, marketing, cow nutrition, breeding, and pricing that reflects the fat and protein content of milk, not just volume, Gabriel said. Because the best land for farming is either in production or lost to development, some farmers are spending up to $1,000 per acre to improve drainage on less productive fields, he said.
“There are no bad farmers left,” Shoen said. “They’re all pretty smart business people.”
A few local farms have sidestepped the commodities market by selling directly to the consumer. The McEachron family in Salem started bottling its own milk under the name Battenkill Valley Creamery in 2008. The creamery sells through home delivery in selected areas of Saratoga County, about 50 supermarkets, smaller shops as far away as New York City, and through its on-farm store, said Seth McEachron. The farm store also carries the creamery’s own ice cream.
“Our sales are growing steadily and rapidly,” McEachron said. “We have very loyal customers that really seem to enjoy our products.”
It didn’t hurt that Battenkill Valley was judged the highest quality milk in New York at the 2010 and 2016 New York State Fairs, the second time with a perfect score of 100.
“We saw a little bump in sales as a result,” McEachron said.
The McEachrons bought a second farm in the neighboring town of Jackson in 2015. In April, they installed four robotic milking machines for its roughly 225 milking cows. The new machines save on labor costs and contribute to cow comfort, since the cows can decide for themselves when their full udders need milking. ID collars on the cows track their activity, eating and drinking, and identify them to the milking machine to record their milk production. McEachron can monitor the data at home via computer.
Kings Ransom Farm started bottling and delivering some of the milk from its 900 cows in 2010. (The rest is sold through a dairy cooperative.) In April it opened a 10,000-square-foot bottling plant to serve its 500 home delivery customers, restaurants, and retail outlets.
“The retail has been going very well,” King said. “Our customer base is growing.”
The taste of the farm-fresh milk is “first and foremost,” he said. “We get great reviews from our customers. That’s combined with being a small local dairy, where people can get to know the farmers. People trust our production methods. They can come to the farm and see for themselves.”
The farm installed an individual cow monitoring system last year, what King called “Fitbits for cows.” It’s similar to the system at Battenkill Valley Creamery. “Some new technology requires a substantial investment on the production side,” he noted.
While value-added products such as bottled milk and farmstead cheese can be good ventures for some farms, they aren’t for everyone, Lockwood warned.
“They’re very capital-intensive,” she said. “The farm needs a good business plan and capital to invest.”
Source: Posstar
Link: http://poststar.com/highlights/outlook/2017/technology-has-changed-dairy-industry/article_de918388-de3e-5a5a-bb2f-c691e5367fcd.html
