The USMCA trade deal passed in the senate with overwhelming support. Tom Vilsack, president and CEO of the U.S. Diary Export Council, joins "Squawk Box" to discuss the impact. Nathan Chittenden carefully slung a newborn calf over his shoulders and marched her over to his dairy barn to join a dozen other babies.
“Sometimes I feel like a school principal trying to remember everyone’s names,” Chittenden, 41, said of his dairy cows.
Chittenden’s herd is in good health, but the dairy farm his family runs here in Rensselaer County, about two hours north of New York City, is under immense pressure.
Milk makers in the United States are disappearing as consolidation in the industry and changing consumer tastes have made it tougher for small farms to survive. In November, U.S. dairy giant Dean Foods filed for bankruptcy protection, blaming the fact that Americans are drinking less traditional cow’s milk and switching to non-dairy alternatives. The company is considering selling itself to the milk cooperative Dairy Farmers of America.
Meanwhile, falling milk prices and President Donald Trump’s trade wars have sent scores of farmers out of business. Overall, the U.S. has lost nearly 20,000 licensed dairy farms, a roughly 30% decline, over the past decade, according to the U.S. Department of Agriculture. It’s in line with a long-term trend: Between 1992 to 2018, over 94,000 family dairy farms closed their operations at a rate of 10 per day, according to the National Farmers Union.
Chittenden has watched his farming neighbors disappear one by one, including five farms on his father’s side of the family over the course of 20 years.
“It crushes me,” said Chittenden, a third-generation farmer at Dutch Hollow Farm. “We’ve lost a lot of farms in the Northeast. Every single one of those farmers was a neighbor and a friend to us.”
“We knew them, and now they aren’t there. Their history is gone and will never be back,” he added.
‘Everyone was stressed’
Chittenden said his family started the farm in 1976 with 55 Jersey cows and has a herd of about 800 today. He farms alongside his two brothers and parents.
In the 1990s, Chittenden’s family made the decision to take on more debt to expand operations. They bought more cows, hired more people and worked longer hours to keep up production. That type of capital investment would be impossible for family dairies to take on today because of surplus milk and lower prices, Chittenden said.
“The stress on my family was palpable. Everyone was stressed, and they took that stress home into their personal lives,” he recalled.
The farm eventually became profitable after several years, but it came at a cost. “We were not working human hours. The family unit was no longer operating — day in and day out we were working and doing everything we could to get out of debt,” Chittenden said. “It was not a happy time.”
The family saw more success after the expansion. Chittenden became a director on the Cornell Cooperative Extension board for 12 years starting in 2007. His family also hired more people to work in the barns and help grow crops for cattle feed.
The family would contend with other problems in the 2010s. For one thing, falling milk prices made it harder to maintain profits. Milk prices have declined about 23% over the past five years as milk becomes easier to produce and state regulations have increased production, according to the USDA.
It’s an industry-wide problem for smaller scale dairy farmers. The margin between the cost of production and selling price has not been enough to make a living, especially when dairy farms consolidate into larger operations that end up dominating the industry.
Consolidation in the dairy sector has led to larger farms with more cows with a high level of productivity. For instance, there was a 13% increase in milk produced per cow from 2009 to 2018 across the country.
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