Dairy farmers trudging through tough times
Jason Wiebe is no stranger to challenging times.
The third-generation owner of his family’s dairy farm has weathered years of price drops and hikes in production costs.
These pressures spurred him to diversify into a cheese-making operation that has kept his family milking 120 mixed breed cows as many of his peers quit the business.
But has never seen anything like the havoc shutdowns mandated by COVID-19 are wreaking on the handful of farming operations that still milk cows in the county.
“We have had times of very low milk prices, but nothing like this,” he said. “After Sept. 11, there were a day or two of rumors, but the milk trucks showed up and everything kept moving. Now it appears like it’s not.”
Down the drain
Across the country and in Kansas, dairy farms have taken a hit as closure of schools and the shuttering or reduced business of restaurants in the wake of COVID-19 slashed the amount of milk, cheese and butter purchased.
The wipeout in demand has forced anywhere from 5 to 10 % of the state’s farmers to dump milk along with much larger producers in other states, said Stephanie Eckroat, executive director of the Kansas Dairy Commission, adding that dumped milk is often used as fertilizer for crops.
“Seeing milk go down the drain just breaks your heart,” she said. “A lot of work goes into it, but it’s perishable.”
Product sent to retailers is not packaged the same way as goods destined for industrial or restaurant customers, creating even more of a bottleneck, she said.
Springtime is also prime “freshening season” as cows begin to produce milk after the birth of calves and warmer weather encourages milking.
“It’s a perfect storm, oh my gosh,” she said. “We have all this milk and nowhere to go with it.”
Eckroat said dairy farmers who sell their milk to cooperatives are the ones who have been asked to dump, but said most co-ops are paying them for milk that would have been delivered with farm subsidies.
David Boyer, president of the board of Central Equity Milk, a cooperative that serves farmers in Kansas, Oklahoma, Arkansas, and Missouri said the demands of maintaining dairy herds mean farmers have few ways to adjust.
“Many small businesses, not all, can close until this passes us by, but you can’t do that with a dairy farm,” he said “If you could, it would be much simpler.”
Dairy producers are facing a challenge not of their own making, very suddenly without any ability to plan, and the impact has been global.
“I don’t think this is like World War II or the Great Depression I think this is a whole lot different,” he said. “Those were the results of politics or the way we manage the stock market. They were people problems. This is not a people problem.”
Dairy farmers are “pretty much survival people” but Boyer admits that one really knows what the future holds, he said.
“If I could tell you what crystal ball would figure that out, I wouldn’t be milking cows, I’d be making crystal ball predictions and selling them,” he said. “I don’t think anyone knows where this is headed.”
Help is on the way
In the meantime, the Wiebe family and their two full and four part-time employees continue making four weekly batches of cheese, about 600 pounds at a time.
Flavors like garlic and herb, chipotle, bacon, Cajun and dill spice up their offerings of sharp, medium and mild cheddars.
There have been some spots of good news for the Wiebes, even amid the crisis.
Direct orders for the farm’s cheeses have gone up. On Tuesday they had a dozen orders waiting and have been averaging at least one or two a day.
The possibility of a new distributor on the east coast is another reason for hope.
Wiebe also applied for, and received, a small business loan under the Paycheck Protection Program recently.
“That will help with paychecks as we have been going without as much for income,” he said.
Other federal aid is also in the cards for Kansas’ farmers.
The U.S. Department of Agriculture has announced a $19 billion farm aid package that will include $16 billion in direct payments and $3 billion in food purchases.
A sign-up system for payments is expected to be running at the end of May.
Commodities prices still look challenging for the rest of the year, though.
Before COVID-19 struck, milk prices broke the $20 per hundredweight mark at the end of 2019, according the Chicago Mercantile Exchange.
They slid to $16.20 by the end of February on news of the COVID-19 outbreak and plummeted to $10.39 by the end of April.
Wiebe estimated dairy farmers need to make $16 or 17 per hundredweight just to cover expenses.
“That varies much in terms of operations…it may be even higher,” he said. Futures stood at $13.20 near press time.
“They appear headed back up,” said Wiebe of a recent rally. “I am cautiously optimistic, I guess.”
Last modified May 13, 2020