February 11, 2007

Dairy farming in Vermont

The Burlington Free Press today (2/11/07) has a column asking this question: "What needs to be done to ensure the future of dairy farming in Vermont?" (10 % of dairy farmers left the business since 2005; we have 40% fewer farms now than in 1997).

The answers from eight people within the industry offer several perspectives, but the common thread is that Vermont dairy farmers need a higher price for their milk, either through changes in the Byzantine pricing structure, direct subsidies from taxpayers (though they are reluctant to be that blunt about it) or higher prices to the consumer that flow back to the farmer.

The inescapable fact is Vermont cannot be cost competitive with other areas of the country in the production of bulk milk. In my thinking, there are only two practical long term alternatives (other than leaving the business) for farmers. First, some farmers should diversify away from bulk milk to other agricultural products to reduce reliance on a commodity cost/price structure that will always work to their disadvantage. Second, those that remain in dairying must become larger and at the same time as cost-efficient as technology allows, perhaps also capitalizing on the growing "organic" movement to command higher consumer prices.

It is not realistic to believe that Vermont can sway or sustain the pricing for a commodity product like bulk milk in a regional and national marketplace. Vermont is much better served by leveraging the higher margin products derived from milk, e. g., specialty cheeses, ice cream, etc., from the most efficient farms.

Meanwhile, Vermont should capitalize on it's quality image, in league with the private sector, to market the dickens out of these value-added products to our residents and visitors while exporting them to people where price is not the most important factor in purchase decisions.

I think an online marketplace for our "best-in-class" Vermont grown food and derived products is a necessity.
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