It’s like comparing a Lamborghini with a rusty old farm truck.
Both are vehicles with wheels and engines. Other than that, there’s not much they have in common.
That’s how I would describe the modest dairy farm I grew on up near Estelline, about 25 miles south of Watertown, with the Boadwine Dairy Farm near Baltic, a few miles north of Sioux Falls, that Grace and I toured on Saturday.
The Baltic farm held its annual open house, displaying the factory-like operation that produces oceans of milk every year. Workers, mostly Hispanic, milk more than 2,000 cows three times a day. With the cows averaging around 90 pounds daily, that means the dairy produces 180,000 pounds of milk. That’s per day.
But despite that massive level of milk production, the dairy isn’t cashing in right now. Milk is bringing around $15.35 per hundredweight, or 100 pounds. In 2014, dairies were getting as much as $24 per hundredweight, and for farmers, it was a creamy situation.
What has happened is, production has far exceeded demand. Farmers are pouring more and more milk into an over-saturated system, trying to turn a profit. Right now, it’s almost impossible, with high feed costs, the price of electricity and other expenses making it a losing proposition.
It costs about $1.92 to produce a gallon of milk, but on average, farmers get $1.32 per gallon. I’m not an economist, but that is a losing proposition.
I spoke with Riley Boadwine on Saturday. He’s the latest family member to run the dairy operation, which started with a few head of cattle in 1874 but expanded dramatically in the 1990s.
“I think the money people made in 2014 is what they’re surviving off today,” the lanky young farmer said as we walked around the grounds, where an estimated 1,600 people were provided a tour of the farm and then served lunch and ice cream. Representatives from South Dakota Corn, feed companies and other partners with this multi-million-dollar business were present to help.
It’s a far cry from the small dairy herd I milked in the 1970s and early 1980s. My grandfather and dad milked cows for eight decades, and like most dairymen, we milked enough to turn a small profit, as long as feed wasn’t too costly, our calves survived and the price of milk remained strong.
There are fewer and fewer of those family farms now. When I milked cows, and owned a few head, there were 650,000 dairy operations in the United States. According to the U.S. Department of Agriculture, there were 40,219 dairy farms at the end of 2017, with a growing number of them mega-dairies like the Boadwine operation.
Thanks to improved cattle genetics and superior feed, they are expected to produce almost 219 billion gallons of milk in 2018.
Despite all that, or likely because of it, dairies are struggling. Small operations are folding, many farms are reducing the size of their herds, and the stress is literally a killer, as farmer suicides are rising dramatically.
President Donald Trump blames Canada for the dairy dilemma, saying its production quota system is unfair to American producers. Canada controls the amount of dairy, egg and poultry products produced and limits both dairy imports and exports. It’s intended to keep prices stable and protect farmers.
But Trump caused some of the pain by withdrawing from the Trans-Pacific Partnership. While America walked away, Canada struck deals with 10 other nations, including Japan, Australia and Mexico, and they are allowed to send an increasingly amount of their dairy products into the Great White North tariff-free.
Trade wars don’t seem to be the answer. We want Canada to lower its high tariffs on American dairy products, but battling with our neighbor, which has been a reliable trade partner, seems like a poor way to accomplish our goals.
The dairy industry wants us to emulate Canada, setting a base price for milk — $20 per hundredweight — to insure farmers can survive. One problem is, dairies usually ramp up production to cash in on better prices, which floods the market.
Some suggest donating extra dairy products to food banks. The problem is, more and more dairy farmers might end up at those food banks to get enough food to survive.
What is the answer? A stable price, reduced production and finding new markets would all help. Those will be difficult to accomplish, but expect more large dairies like the Boadwine farm, a truly impressive operation, to be able to withstand the pressure than small family farms.
The Lamborghini will leave the farm truck, and the small farmers, in the dust.