Dairy Farmers Hit Harder By Recession
LIANE HANSEN, host:
This is WEEKEND EDITION from NPR News. I'm Liane Hansen.
Farmers are particularly vulnerable to dips in the economy, and this recession has been very bad for the dairy industry.
Mr. JOHN STULP (Commissioner of Agriculture, Colorado): You know, I recently bought a gallon of milk for the same price that probably a year and a half ago that I paid for a quart of milk.
HANSEN: That's John Stulp, Colorado's commissioner of agriculture. His state's dairy industry has been especially hurt. At least half a dozen dairies in Colorado declared bankruptcy this year. Several had loans with Colorado-based New Frontier Bank, a huge agricultural lender that collapsed last spring.
In a moment we'll speak to one of the farmers who declared bankruptcy after that bank's failure. Stulp says dairy farmers are feeling the recession more than most because they can't change the cost of doing business very easily.
Mr. STULP: If you own a dairy cow, you can't just flip the switch, so to speak, and stop taking care of her or stop milking her. And so a dairyman doesn't have the luxury of turning off his plant or downsizing this quickly as a lot of other industry might have.
HANSEN: So, even when the price of milk plummets, the day-to-day operating costs of a dairy farm stay pretty much the same, which means that farmers slide deeper and deeper into debt when prices don't cover costs. Stulp says he doesn't believe the hard times are over.
Mr. STULP: I think there will be more dairies that close before the situation gets better. I've had some individuals tell me that, you know, they can last for another six months, but then they may have to look at bankruptcy or selling out or something like that. But it's all going to be dependent on what this average price of milk does. If it stays low like it is right now, well, we're going to see a lot more negative things happening in the dairy industry. If it recovers soon, well, then I think many of them will recover.
HANSEN: Jim Docheff has run his family's dairy farm in Longmont, Colorado for more than 20 years. He's one of the farmers who declared bankruptcy when New Frontier Bank folded last spring. Jim joins us from Boulder, Colorado. Thanks for your time and welcome to the program, Jim.
Mr. JIM DOCHEFF (Dairy Farmer): Thank you for inviting me.
HANSEN: Tell us, when did you realize that this downturn was going to be worse than others for your dairy operation?
Mr. DOCHEFF: Probably just about a year ago, last October.
HANSEN: What kind of changes did you begin to make to try to stay afloat?
Mr. DOCHEFF: We drastically cut costs throughout the dairy. We looked at every penny we were spending and just really analyzed if that was something we needed to be doing. But there's limitations - the cows need to be fed, they need to be taken care of, so we didn't want to jeopardize the health of the cows.
HANSEN: So, you declared bankruptcy.
Mr. DOCHEFF: Correct.
HANSEN: And you have a new lender. Your dairy farm is up and running as usual?
Mr. DOCHEFF: Yes. And really even through the bankruptcy, it was just tight operating with no line of credit, but we never really did skip a beat. But we're breathing much easier since September 1 when we got a new lender.
HANSEN: Yeah. Do you think you're out of the woods though?
Mr. DOCHEFF: Oh, you're never out of the woods, but we're almost to the top of the hill. And I think in a few more months here we're going to be over the hump.
HANSEN: In a moment we're going to hear from a clinical psychologist who says that in the past year more farmers have had to deal with behavioral health issues because of what's happening in the economy and to their farms. Some of the things that were mentioned were stress and depression. Is that happening where you are?
Mr. DOCHEFF: Yes, very much so, very much so.
HANSEN: What have you seen? What kind of problems are people having?
Mr. DOCHEFF: Stress is the biggest thing. With the bank situation and everything, I didn't know if they were going to show up at a hearts beat notice and load all the cows up and shut me down. So, just that stress that - not knowing.
HANSEN: This has been in your family for four generations and now you've got your children involved in the operation. I mean, if you were to lose this, do you feel like you'd almost lose who you are?
Mr. DOCHEFF: Exactly. That was my biggest fear and that was the reason for the bankruptcy. The FDIC, when they took the bank over, they wanted to come in and just get what they could for it. And it came to the point they were ready to start liquidating and that forced us into the bankruptcy to stop that proceeding there. And it was. You had that feeling of failure that, man, my great-granddad started this 100 years ago with two nickels in his pocket and I'm going to lose it all here.
HANSEN: But you haven't yet.
Mr. DOCHEFF: Haven't yet.
HANSEN: And you're optimistic?
Mr. DOCHEFF: Very - you have to be. You know, you're an eternal optimist if you're a farmer.
HANSEN: What plans do you have for the future? Are you going to wait it out on your farm or are you contemplating selling it maybe?
Mr. DOCHEFF: Oh no. I'm the fourth generation. I have a son that joined the operation a year ago, that's the fifth generation, and hopefully it'll be in for another three, four generations in the Docheff family.
HANSEN: Jim Docheff owns Diamond D Dairy in Longmont, Colorado. Thanks so much. Good luck to you.
Mr. DOCHEFF: Thank you.
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