Dairy farming in decline in Missouri

Friday, June 27, 2014 | 6:00 a.m. CDT; updated 7:58 p.m. CDT, Sunday, June 29, 2014
Brandt farm, a family dairy farm owned by Alfred Brandt, raises dairy cows. Droughts in recent years have driven up the cost of grasses, grains and other feed, making it harder to turn a profit.

LINN — When Alfred Brandt was growing up in the 1970s, the family’s dairy farm was one of about 40 in Osage County, and most of them were small operations with about 50 milking cows. Today, there are only five dairy farms in the mid-Missouri county, and they all have at least twice that many cows so they can stay in business.

The past five years have been particularly hard on farmers because droughts have caused relatively low crop yields and high costs for grasses, grains and other feed. When feed costs add up to more than 50 percent of a dairy farm's budget, Brandt said, dairymen typically sell their cows and depend on other types of farming income.

The Missouri General Assembly passed the Dairy Revitalization Act in May as a way to help farmers meet their costs when bad weather ruins crops and as a way to bring new farmers into the dairy business.

The dairy act would set up a state fund to subsidize up to 70 percent of the cost of insurance premiums purchased through the national farm bill. Gov. Jay Nixon has until July 14 to decide whether to sign the act into law. The bill could cost more than $4 million in general revenue funds beginning in 2016, depending on the number of farmers that choose to enroll.

The Missouri dairy industry employs around 24,000 workers and contributes $2 billion to the state's annual gross domestic product.

Dave Drennan, executive director of the Missouri Dairy Association, said he hopes Nixon will sign the bill.

How the Dairy Revitalization Act works

The Missouri General Assembly passed the Dairy Revitalization Act in May, and Gov. Jay Nixon must decide by July 14 whether to sign it into law.

The act relates to the recently passed national farm bill, which includes a voluntary insurance program that covers farmers hit by droughts or other natural disasters. Farmers pay a premium on a sliding scale; the more expensive options have higher payouts. The insurance program takes the place of direct disaster assistance.

The Missouri Dairy Revitalization Act includes a provision that would use state money to pay most of the premium costs for milk producers. For example, the state would pay up to 70 percent of the highest premium cost. The fund would cover up to 34 cents per hundred pounds of milk, or 11.6 gallons.

The subsidy is designed to be an incentive for dairy farmers to enroll in the new insurance program and choose the high-reimbursement option. By enrolling in a higher bracket, they would receive a larger reimbursement for feed costs and be more likely to survive a spike in feed costs caused by a natural disaster.

For example, if a farmer usually produces 4 million gallons of milk a year, and he or she chooses the highest insurance bracket, the farmer would pay $5,400 with the state subsidy, and $19,000 without the subsidy.

“This industry has really been taken for granted in this state for a long time,” Drennan said. “Unless something is done, you’re putting processing plants and farms at risk.”

Drennan attributes the decline in dairy farming to several factors, including economic conditions, a lack of labor, aging farmers and the expense of entering the business.

Most dairy farmers either inherited the business or got into the industry in the 1970s or 1980s when startup costs weren't so hefty.

The cost of feed back then was lower, and the price of milk was higher. That's a luxury that the business no longer has, Brandt said. When Brandt was growing up, the cost of getting into the dairy industry was around $30,000. Now, he estimates it would require about $5 million in initial land, building and cow costs; a price that most young farmers are unable to afford.

Brandt bought his 235-acre farm near Linn from his parents in 2009 and has been managing the farm since the late 1990s after finishing college and moving back home.

“I’ve always enjoyed being around cows,” Brandt said. “I don’t remember ever wanting to do anything else.”

Brandt’s day begins around 5 a.m., and he finishes milking the cows by just after 8 a.m. He spends the rest of the morning and afternoon distributing feed, cleaning the barn, hauling manure and fixing things. A part-time worker milks the cows again at around 5 p.m.

“Working on the farm has taught me to be responsible and a hard worker,” Brandt said. “I won’t quit until a job it's done right.”

Brandt, 46, is married and has a 2-year-old son. His 71-year-old father comes to the farm around 5:45 every morning to help him milk the cows.

He grows some of the grains — such as alfafa, hay and corn — that he feeds to his cows, and he has other grains trucked in. Finding suppliers is harder now than it was several years ago.

Suppliers used to make trips all across the state servicing clients and seeking new ones. Now, most feed companies make fewer trips to rural farms, which means higher costs for Brandt and other farmers.

“It takes a lot of perseverance,” Brandt said. “I enjoy doing it, so I don’t get down about the cyclical nature of the industry.”

Drennan said many people don’t realize how dependent agriculture is on the weather. “We are price takers, not price makers,” he said.

Larry Purdon, a dairy farmer and chairman of the Missouri Dairy Association, has been in the business for more than 50 years, and he believes the loss of farmers is taking a toll.

“Agriculture is the biggest and most important industry in Missouri,” Purdon said. “People need to understand we have not been able to produce enough milk for Missouri’s needs. I would hate to see Missourians be the best customers of Texas or New Mexico.”

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