Dairy Farmers See Low Profit From Milk Amid Rising Costs
Lackawanna County dairy farmer Paul Manning is thankful ice cream is a big revenue producer for his business because he said selling milk doesn’t make much money.
“It’s difficult to turn even a small profit these days,” Manning said.
Manning, his wife Jean and their sons Brian, Ken and Kevin run the family business Manning Farm Dairy, which includes a farm with about 100 cows in North Abington Twp. and stores in Scranton, Clarks Summit and Dunmore where they sell ice cream, milk and other products.
Manning charges $1.80 for a half gallon of regular milk, $1.75 for 2 percent milk and $1.70 for skim milk they produce, which is slightly above the state minimum price.
He said there’s not much money to be made selling milk and costs to run the dairy farm are rising.
“Insurance is up. Diesel is up,” Manning said. “I feel bad for some my friends who produce milk and ship it. It’s a difficult situation for them.”
Some dairy farmers have gone out of business and Manning said there are few left in the area. He said he is lucky to have three sons to keep the farm running.
Kevin Manning, the fourth generation dairy farmer in his family, owns an ice cream shop with his wife Kacy in downtown Wilkes-Barre and they run a popular ice cream truck as well.
He said his family does not accept credit cards because they would lose money on milk. Some dairy farmers produce more milk than they sell, he said.
Like his father, he said most of their revenue comes from ice cream and that’s how they survive. He said they don’t want to raise the price of milk for customers who depend on it. Dairy farmers also face competition from retailers like Walmart with low milk prices, he said.
Arden Tewksbury, manager of the Progressive Agriculture Organization who has operated a dairy farm in Meshoppen in Wyoming County for more than 50 years, recently testified at a Pennsylvania Milk Marketing Board hearing in Harrisburg asking that the premium on milk be raised for dairy farmers in Pennsylvania.
Tewksbury said Pennsylvania dairy farmers were underpaid about $500 million during 2017 and this underpayment will be surpassed in 2018.
The loss to Pennsylvania dairy farmers in 2017 caused a $2.5 billion loss to the Pennsylvania rural infrastructure, he said.
Tewskbury said the underpayment to dairy farmers is not the Pennsylvania Milk Marketing Board’s fault, but the blame belongs in Washington D.C. He charged that neither the U.S. Congress or U.S. Department of Agriculture is willing to tackle real problems facing dairy farmers. The Pennsylvania Milk Marketing Board is limited as to wthey can do to help dairy farmers, he said.
“We strongly feel the inadequate pricing formula used by the USDA to price milk to all U.S. dairy farmers is totally inadequate,” Tewsbury said.
According to Tewksbury, there are about 6,500 dairy farmers in Pennsylvania and some are facing serious financial problems. He said dairy farmers are not being making enough money to cover operation costs and some are going out of business.
He said the premium for milk “must be fair to the dairy farmers, fair to the buying handlers and fair to the Pennsylvania consumers.”
A new state program will offer grants totaling $5 million to support Pennsylvania’s struggling dairy industry, according to Senate Majority Leader Jake Corman and Senate Agriculture and Rural Affairs Committee Chairman Elder Vogel.
The Pennsylvania Dairy Industry Investment Program is designed to improve the production, processing and distribution of dairy products throughout the state.
The program will provide grants of up to $100,000 for research and development and marketing projects and up to $50,000 for value-added processing projects and dairy operations transitioning to organic products.
“The dairy industry is one of the most important parts of Pennsylvania’s agriculture economy, but market conditions have created enormous challenges for dairy operations in communities throughout the state,” Corman said. “This new program will provide a much-needed opportunity for members of the dairy industry to modernize, streamline and expand their operations while keeping pace with changes within the industry.”
Vogel said dairy farmers have been struggling for years due to a variety of financial issues that are “largely beyond their control.”
“Being able to purchase new equipment, offer new types of products for consumers or expand the market for their existing products will help many dairy operations not only survive, but also succeed and grow,” Vogel said.
Eligible applicants include dairy businesses and cooperatives, not-for-profit agricultural organizations, schools, and institutions of higher learning. Applications will be considered on a rolling basis as long as funding is available.
The Commonwealth Financing Authority administers the program. Grants are only available for projects that are not already underway. A 15 percent cash match of the total project cost is required.
Interested applicants should submit an application online with the Department of Community and Economic Development Electronic Single Application for Assistance at www.esa.dced.state.pa.us.
email@example.com, 570-821-2115, @CVAllabaugh