Debra J. Groom / The Post-Standard
Published: Saturday, October 09, 2010
The Rohe dairy farm has been a fixture in the town of Onondaga for more than 100 years. Sitting high on Onondaga Hill, it has expanded to more than 800 acres on two sites. The farm that started with a few Holsteins has grown to 80 milkers and 25 young stock.
But after today, the cows will be gone. Steve and Trish Rohe are getting out of the dairy business, selling their herd, due in large part to low milk prices that make it more difficult with every passing month to make a living.
“Yes, we’re sad,” Steve Rohe said Wednesday as he took a break from getting the cows ready for today’s auction. “I’ve been doing this all my life. I’m nervous and scared. Nervous and scared that I won’t be milking anymore. And nervous and scared about what the future holds.”
The Rohes are just one dairy operation among many in Central New York, the state and nation to shut down since milk prices paid to farmers began to tank in mid-2008, state officials say. So far this year, the average price has been $15.62 per hundred pounds, or $1.34 a gallon. State figures show the average cost for a New York farmer to produce that milk is as much as $17 per hundred pounds, or $1.47 a gallon.
By contrast, prices per gallon in the grocery store haven’t been that low for years. Statistics from the state Department of Agriculture and Markets show the lowest average retail price in Upstate New York from 2004 through 2009 was $2.27 a gallon, in December 2009.
There are no firm numbers for how many dairy farms in Central New York have closed or stopped producing milk in the last two years. But the number of dairy farms in the state has plummeted by nearly one third in the decade ending in 2009, from 8,032 to 5,495.
State Agriculture Commissioner Patrick Hooker said that while the low price paid for milk prices is a big reason dairy farmers call it quits, it’s not the only reason. Some farmers retire with no heirs or buyers willing to take over. Others succumb to offers from developers to buy their property at premium prices. Still others have trouble finding good workers.
“I think the situation can turn around to some extent,” Hooker said. That is if the federal government institutes policies to keep milk prices from fluctuating wildly from year to year, he said.
“Prices this year certainly haven’t come roaring back,” Hooker said, noting they are as volatile as he’s seen in 10 years.
Leaving the business was a difficult decision for the Rohes, who are the third generation to run the dairy operation on West Seneca Turnpike.
Dairy farming has been their entire lives. Steve Rohe said he’s up at 4 each day, heading to the barn to greet the cows and do the first milking. He remembers trudging out through the snow in the winter to find the milk pump wasn’t working.
Rohe said it was the perfect life for raising children. “I’d wake them up on a Saturday morning and look at their little faces as we’d go out for chores,” he said. He said he knows his cows just like his children.
Rohe plans to continue farming, just without the cows. He’ll plant crops, vegetables and is considering buying a few beef cattle. “If you didn’t love it, you wouldn’t do it,” he said.
With milk prices so low for the past two years, Rohe, 50, said it has been nearly impossible to make ends meet.
“For the small farmer, it’s a struggle for us to make it,” he said. “We’ve borrowed money to stay in business — about $20,000 a year for the past two years. I planned to keep going till about 65. We don’t spend a lot of money on ourselves. We have nothing put away for retirement. I didn’t get wealthy doing this.”
Steven Mooney, assistant professor of dairy science at Morrisville State College, puts the situation facing many dairy farmers in perspective.
“When the cost of production exceeds what you receive, you’re going to have to make a decision,” Mooney said. “When farmers have bottomed out, they turn to bankers and take out loans. But bankers say, ‘We’ll work with you for so long, but we can’t do this forever.’”
With milk prices a little higher this year, some farms are just about breaking even. But “if a farm is just breaking even now, how are they going to pay back those loans?” Mooney asked.
Mark Dennis, state executive officer for the federal Farm Service Agency office in Syracuse, said loan requests to the agency continue to rise. Last year, when milk prices paid to farmers were the lowest since 1979, the agency’s $66 million loan allotment was gone by the end of March. That money is supposed to last all year.
For 2010, Farm Service Agency made 677 new loans totaling a little more than $119 million. In 2009, a total of 754 loans were made totaling $110.8 million.
John Repak, of the Onondaga County Farm Service Agency office, sees firsthand the effects of the squeeze on dairy farmers. Over the last two years in Onondaga County, eight dairy farmers have quit the business — six because of low milk prices. The other two retired.
“When you’ve put 30 years or 40 years into it, you take a situation like the Rohes, it’s just heart-wrenching to get out of the dairying business,” Repak said.
And the loss affects the greater community, he said. The suppliers from whom Rohe bought products are losing a customer.
The milk price problem stems from two sources: supply and demand and an old formula for computing prices derived from cheese prices at the Chicago Mercantile Exchange. Agriculture officials have talked about developing a new way to price milk for at least 20 years, to no avail.
Milk prices fluctuate every year. Consider the price was $19.09 per hundred pounds or $1.65 a gallon, in May 2004 and $11.43 per 100, 99 cents a gallon, in May 2009. The 20-year high came in 2007, when it hovered at $20 per 100 pounds for seven months. The worst year was 1991, when the price remained lower than $13 per hundred pounds for nine months and averaged $11.79.
While prices for milk have continued to flop this year, the costs of seed, feed and fertilizer have risen, Rohe said.
After much soul searching, the Rohes decided the time had come to leave dairying. “I’m not sure I’m doing the right thing,” Steve Rohe said earlier this week. “I look at it as a positive change.”
Even so, the move is bittersweet. “I know I’m going to cry someday when I walk into the barn and there are no cows there,” Rohe said. “But I know they are going to good homes.”
Contact Debra J. Groom at dgroom@syracuse.com, 470-3254 or 251-5586.
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