STEVE INSKEEP, host:
Some dairy farmers have not done well on their investments this year, and are on the brink of insolvency. That's because milk prices are dropping, while the cost of fuel and fertilizer is rising.
Weeks of unrelenting rain have made it almost impossible to plant crops or harvest hay for their cows to eat. Now, the state of Vermont has stepped in to help its farmers.
From Vermont Public Radio, John Dillon reports.
JOHN DILLON reporting:
Marie Odett(ph) farms with her husband and his two brothers, in Bridgeport, Vermont. The Odetts' raise much of their own feed for their 900 cows, but by the end of June, the family was way behind in planting their 800 acres of corn.
The high price of diesel fuel adds to the financial pressure.
Ms. MARIE ODETT (Dairy Farmer, Vermont): When the trucks are all going and the equipment is going, I mean, it's like $2,000 or $3,000 a month more to pay to keep our equipment going.
DILLON: Farmers are used to dealing with unpredictable weather. This year, however, the rains washed out crops just as milk prices fell to new lows. The reason is that milk production has dramatically increased in the west and southwest, driving down prices throughout the country. Two years ago, farmers got paid about $20 for 100 pounds of milk. Now they're getting less than $12 for the same amount.
The dairy crisis brought farmers and Vermont officials to the state house in Montpelier last week. Farming is a capital intensive business, and Mitch Montayne(ph), who farms in St. Albans, Vermont, says his revenues are down about $500,000 this year. The wet weather has just made things worse.
Dairy farmers like Montayne say their corn plants should be knee-high by the Fourth of July to guarantee a good crop by the fall. This year, Montayne's corn has yet to grow at all.
Mr. MITCH MONTAYNE (Vermont Dairy Farmer): I have no corn planted. I planted 300 acres, and we have to plant it all over again if we ever can. We're facing a mess.
DILLON: To help farmers out of their financial mess, Governor Jim Douglas and legislative leaders quickly agreed to spend $8.6 million in surplus funds. Douglas says the state has to step in with a monthly subsidy because dairy farms are vital to the state's agriculture and tourism economy.
Governor JIM DOUGLAS (Republican, Vermont): And we know that an industry, once lost, seldom returns, no matter how bright its long-term prospects may be. I refuse to let the agricultural industry of Vermont slip away.
DILLON: The state's payments will average out to about $7,000 per farm. It's a short-term fix, and dairy economists don't expect milk prices to improve until next year.
One bright spot, however, is the booming business in organic milk. About ten percent of Vermont's 1,200 dairy operations are farming organically, which means they don't use chemical fertilizers or treat their cows with hormones. Two organic dairies are competing for new suppliers, and they pay almost twice as much as conventional buyers.
Lyle Edwards(ph) has farmed for three decades in northern Vermont, and switched to organic production four years ago.
Mr. LYLE EDWARDS (Dairy Farmer, Vermont): These last four years have been the most fun I've had farming. And I've seen a lot of ups and downs in the last 30 years, but - so it's a saving grace for me.
DILLON: Edwards says the high price for organic milk means he can enjoy farming again. But the switch can't be made overnight, because conventional farm fields must be chemical free for three years before they can be certified organic.
For NPR News, I'm John Dillon, in Montpelier, Vermont.
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