Dairy Farmers Pressed to Raise Prices

In Mississippi, dairy farms are closing at a rapid pace. Federal regulations make it harder for smaller operations to be profitable. Dairy farmers are becoming increasingly concerned, and they say their costs are likely to trickle down to the consumer level as milk prices inch up.

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MADELEINE BRAND, host:

We could use a little bit of that water here in Los Angeles. It's been really hot and the driest year ever for L.A. Only 3.2 inches of rain have fallen this year. The yearly average is 15 inches. We've already had a number of fires here in Southern California. Up north, Lake Tahoe is still recovering from a fire that destroyed 250 homes.

ALEX COX, host:

And fire season still has months to go.

BRAND: The high temperatures are affecting dairy farmers. A lot of them have been quietly going out of business, despite high milk prices. The ones that remain are asking Congress to restructure milk pricing guidelines to help them survive. Melanie Peeples reports.

MELANIE PEEPLES: Jason Shaw is the last dairy farmer in Hancock County, Mississippi, just a few miles inland from the Gulf Coast. He spends every afternoon swinging up onto the back of a four-wheeler to roam his pastures and thickets, trying to round up 50 cows for their afternoon milking.

Mr. JASON SHAW (Dairy Farmer): This is just a few of them; there'll be a crew of them when they get going here.

PEEPLES: So they know the drill. They're already heading towards the barn.

Mr. SHAW: Yeah. They're on their way.

PEEPLES: Except for a few that don't want to leave the shade of the trees on a hot day.

Mr. SHAW: They're like a teenager. You have to go get them every day. Come home, Dora.

PEEPLES: Dora, one of Shaw's favorites, doesn't want to leave the shade.

Mr. SHAW: Hey now, fella.

PEEPLES: He tries to coax her and a few others to leave the thicket and then drives off, pretending to leave them.

Mr. SHAW: So they play that game. They know I'm going to come back after them.

PEEPLES: They are like children, playing hide and seek.

Mr. SHAW: Yeah.

PEEPLES: When he finally gets them all moving, they head for the pond, where every one takes a dip to cool off because a hot cow is not a happy cow. And Shaw likes his cows happy. Because a happy, cool cow makes more milk. When they finally make it into the milking barge, Shaw attaches an automatic milker that kind of looks like an octopus.

(Soundbite of milking cow)

PEEPLES: It's about 4:30 in the afternoon and Shaw's been out since 3:45 this morning when the cows got their first milking.

Mr. SHAW: This is hard work, seven days a week, sometimes it's about 24 hours a day.

PEEPLES: On many days he'll go to a second job and spend a few hours welding or fabricating steel to make a little extra cash. There's a reason Shaw's the last dairy farmer in Hancock County. It's gotten so hard to make any money at it. He had to sell off nearly his entire herd after Hurricane Katrina because without electricity he couldn't milk them all.

Mr. SHAW: I loaded them up. I loaded them through that gate right there and most of them leave out of this barn. And that's like losing a member of your family.

PEEPLES: Even worse, because they develop mastitis from not being milked frequently enough, they weren't sold to another dairy farmer. They went for slaughter. And instead of getting the $2,000-a-head price for a good dairy cow, he only got $500 each. Before Katrina, there were 235 dairies in Mississippi, most of them near the coast. Now there are 168.

Mr. WILLIAM PIGOTT (Chairman, Mississippi Farm Bureau Federation Dairy Advisory Committee): There's no time to play around.

PEEPLES: Bill Pigott is the state dairy chairman for the Mississippi Farm Bureau Federation and a dairy farmer himself. Milk prices are good right now, but for so long they weren't. Last year milk prices were the same as what they were in 1978, even though the price of everything it takes to run a dairy farm had skyrocketed. Pigott says it's hard to overcome that many years of disparity.

Mr. PIGOTT: I mean we're here, the (unintelligible) of a losing industry.

PEEPLES: And there's the way the United States milk order system works. It regulates prices and is designed to make sure everyone in the U.S. who wants milk can get it. The problem is dairy farmers in Mississippi and the rest of the entire Southeast don't produce enough milk to feed the amount of people who live here.

So under federal policy, Southeast dairy farmers have to actually pay to ship milk into the region. And the formula for determining how much they pay per mile hasn't changed since the early '80s, even though the price of gasoline has tripled.

Mr. DOUG ERVIN (Mississippi Farm Bureau Federation): It's been a major problem.

PEEPLES: Doug Ervin is the dairy commodity chairman for Mississippi Farm Bureau Federation. And the problem, he says, is just getting worse.

Mr. ERVIN: Every time somebody goes out of business, it's harder for the next one to stay in business.

PEEPLES: That's because the remaining dairy farmers have to then pay to ship even more milk into the region. The Southeast is likely never going to be able to produce enough milk for the region. It's just too hot for the cows, who can't make as much milk in the heat. Right now dairy production is booming in states out West like New Mexico. But Bill Pigott says that doesn't mean the Mississippi dairy farmers should move out West.

Mr. PIGOTT: When you concentrate an industry in a particular area, you run more risks, I think, for security issues.

PEEPLES: Pigott says one outbreak or weather disaster like Katrina could disrupt the entire nation's supply of milk, which after all is a highly perishable commodity.

Dr. CARY BILL HERNDON JR. (Mississippi State University): The contention is that the best milk is locally produced milk.

PEEPLES: Bill Herndon is a professor and dairy economist at Mississippi State University.

Dr. HERNDON JR.: It's freshest; it's highest quality.

PEEPLES: And it costs less to get it to the consumer. Herndon says Southeast dairy farmers' best hope is trying to convince their congressional representatives to make sure the next farm bill makes changes to the milk pricing orders that benefit the Southeast. But doing so, Herndon says, could take several years.

Dr. HERNDON JR.: There's a huge worry that this time lag is going to be too long to save the few dairies that we have left in the Southeast.

PEEPLES: Making those changes won't be easy since the current policy benefits Western dairy farmers. But Southeast dairy farmers are gearing up for the fight because they say they just can't hold on much longer.

For NPR News, I'm Melanie Peeples.

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