MEADOWVIEW, Va. – As a boy, Scott Rector rode with his father in the milk truck. They drove up every hollow and into every nook and cranny to pick up the milk produced by families along their route to the milk plant in Abingdon.
Rector never could’ve imagined that, in one generation, all those cows would be gone.
“The dairy business was good back in the ’70s,” said Rector, who milks about 150 cows on his farm in Meadowview. “[My dad] got more money in the ’70s than we got in 2009.”
According to the National Agricultural Statistics Service, in 1950 there were more than 3,000 farms with dairy cows in Washington County. By 1987, that number had dropped to just more than 150.
In 2007, the most recent agricultural census counted just 34 farms with dairy cows. Now, only 10 dairies remain in the county, and some of them are hanging on by a thread.
The trend has been the same across Southwest Virginia and Northeast Tennessee and some farmers, including Rector, said the current Great Recession could be the death knell for the region’s dairy industry.
Scott Rector, the third-generation dairyman, knows that with milk prices low and costs ever rising he won’t be able to pass on the family business to his sons. He said he’s already told them to do something else with their lives.
“It goes back to economics,” Rector said. “The input cost has got so high, and the price for milk … we’ve been below break-even for the past 13 or 14 months.”
He blames the spike in fuel costs – resulting in price increases for feed and fertilizer – and government regulation, including milk testing requirements, for adding to his overhead. If the price he gets for his milk doesn’t go up, he said, the prognosis for a dairy that’s been in business for 66 years is that it won’t continue for long.
“We’re all going out of business,” he said. “Pretty soon there won’t be any of us.”
Good old days
When his father started milking cows in the 1940s, Wayne Rector was a boy and all the milking was done by hand. Father and son milked 14 cows, which back then was just enough to fill a couple of 10-gallon cans.
They stored the cans in a cooler full of water in the barn and then took them by wheelbarrow out to the road, where the milk man picked them up.
To Wayne Rector, it doesn’t seem too long ago that every family kept a few cows and sold the milk for the cash they needed to buy groceries and pay the electric bill.
Among the structures on the property where the Rectors still farm is a century-old dairy barn. Bent with age and surrounded by more recent buildings, the barn illustrates the dairy industry’s longevity here.
Kenneth Reynolds, a longtime Washington County farmer who serves on the Washington County Board of Supervisors, also remembers when his parents sold milk from their farm.
“Almost every farm sold milk,” Reynolds said. “The dairy industry was a vital part of Washington County’s agriculture at that time.”
The system that existed is recalled as equally idyllic by nonfarmers, who had milk delivered to their porches daily.
“They would deliver it in glass bottles, and then you would rinse them out and give them [back], and they would wash them and sterilize and re-use them. I always thought that was brilliant,” said Melissa Watson, library manager for the Historical Society of Washington County, Va., and a longtime Abingdon resident for whom the milk truck was a common sight in the 1960s.
“For some reason, I don’t know if it’s just nostalgia, but it seems like the milk was better,” she said. “It tasted better, I swear it did.”
By the 1960s, farmers had begun to feel the pressure from outside competition and a shift away from demand for the evaporated milk that was once shipped out of Abingdon by railroad car.
“The market [for the lower-grade milk used at the milk plant] just dried up over a period of time, so the farmers that stayed in the dairy business produced Grade A milk, which is what we used to drink and to make pasteurized products out of now,” Reynolds said.
“We didn’t feel like we had a large enough farm at that time to make a big Grade A farm like the trend was going towards [in the mid-60s], so we just sold our dairy cows and purchased beef cows in their place.”
A lot of families made the same switch, Reynolds said, because with small farms they couldn’t compete in the Grade A milk market. At the same time, he said, off-the-farm job opportunities grew in a number of small industries, and it was easier for people to raise beef cattle as a sideline than to milk cows.
Trending bigger
The next big change to come along, said Scott Rector, was the bulk tank system. Now, instead of 10-gallon milk cans, farmers were expected to store their milk in bulk tanks, which allowed for easier collection by tank trucks that now ran routes with fewer stops.
“That kind of weeded out the little people,” Rector said. “You got big enough to have a bulk tank or you got out.”
Ultimately, the milk plant was closed, and as time went on the farmers’ milk was trucked farther and farther to be sold.
When the Reagan administration offered a dairy buyout in the mid-1980s, an effort to reduce supply and thus increase the price farmers received for their milk, a large number of Washington County farmers took the deal, said Robert Berry, who runs Berry Brothers Dairy with his brother outside Abingdon.
“I think 25 dairies [in Washington County] went out at one time, and they got paid pretty well to do it, too,” Berry said. “Everybody wants to go to locally grown products now; that’s what we got away from in the ’80s.”
Don Blayney, an agricultural economist for USDA’s Economic Research Service, said the gradual loss of dairies is a trend that goes far beyond this region. It’s nationwide, he said, and has come with the changes in farming technology and practices.
“Over time, with the technological changes and adoption of the new equipment and new farm management techniques, farmers have had to adapt or get bigger in order to take advantage of the advantages that those things give,” Blayney said. “A lot of technology for dairy farmers is not cheap technology.”
Also, he said, farms have moved increasingly toward specialization. In other words, instead of a dairy farmer raising all the feed crops for his cows, he typically will buy the feed from elsewhere and focus on improving the cows’ milk production.
In Western states, those trends led to mega-farms growing huge in the effort to spread costs over more and more milk production. In the Appalachians, farms have stayed relatively small.
“There’s no doubt that the costs are going up, and milk pricing … has not been going up as fast as the cost side, so … there is a squeeze there,” Blayney said.
He said milk prices have been more volatile since the 1980s, when the federal government lowered the floor for the price support program. And, while the up-and-down shocks have pushed some farmers out of business, none has reached the magnitude of the recent downturn in the economy.
Milk prices were high when the economy was soaring, he said, “and then the entire economic collapse occurred and prices just zoomed down from that point on, bottoming out in 2009.”
“Now, of course, what didn’t happen is the costs didn’t collapse for that milk, for the inputs, so the squeeze became even worse,” he said, “and the only way producers could remain in business was to chew up equity if they had any or borrow money or try to borrow more money in an environment where it was hard for anyone to do that.”
As long as there remains a demand for milk, dairies of some kind are going to stay in business, he said. But at the same time, the number of farms will continue to decline.
He said the big farms will always be around, and so will the tiny organic farms that serve a niche market. The ones he’s unsure about are the farms in the middle – those that milk between 50 and 300 or so cows.
Dairy farms in Washington County and the surrounding region tend to fit in that “in between” category.
Pricing and policy
With the pain of recession being felt by farmers across the country, organizations that advocate for farmers are seeking policy changes that they believe will help them stay in business.
Kathy Ozer, executive director of the National Family Farm Coalition, said her organization is pushing for action at the federal level to reform the milk pricing system so dairy farmers get paid at prices that better reflect their production costs.
“The current system … basically allows large co-ops and others to have too much control in controlling the dairy supply,” Ozer said. “Way too much ability to lower the price at the farm level and not provide dairy farmers a fair price while still continuing to charge consumers what, in our view, is relatively too high a price because of what the farmer gets.”
At the basis of the issue is the fact that milk, unlike some other products, can’t sit in a silo and wait for a good price; it must be sold immediately. That leaves farmers at a disadvantage when dealing with buyers.
Ozer said more anti-trust law enforcement is needed against large dairy co-ops and a better milk pricing system is needed that encourages farmers to continue producing in different regions of the country while limiting the importation of milk substitutes from abroad.
Scott Rector said he hopes the government will rein in a system he believes is taking advantage of farmers.
“We go out here and try to do an honest day’s work, and all you expect is an honest day’s pay, and we’re not getting that right now,” he said.
He believes that, right now, Southwest Virginia’s dairy industry is heading down a path of extinction.
“The processors and the milk marketers that we have are getting rich off of us,” he said. “If you figure what a pint of milk is at the store, which is about $1, and you figure out what we’re getting for a hundredweight, somebody’s getting rich off the milk, and it’s not the farmer.”
For the past month, milk prices have been about $16 for a hundredweight, which Rector said is a break-even price; but for the previous year-plus, it’s been well below that.
If the prices paid to farmers don’t improve, the dairy industry will continue to die here, he said. And farmers won’t be the only ones to suffer.
“You’re already seeing health issues with food, like the big egg deal [salmonella scare] just recently,” Rector said, “and when you start getting industrialized farming, as I call it, on a big scale, the quality issue of your products that you’re going to buy is out the window.”
Philosophy of survival
At Highland Dairy Farm near Glade Spring, owner Dave Johnson said he’s been lucky.
Unlike many farmers in the area, with 1,100 acres he has enough land to raise all the corn he needs to feed his dairy herd, making him less susceptible to increases in the price of feed. He also has something else many other farmers lack: a new generation interested in working the farm. Both 26-year-old daughter Rena and 31-year-old nephew Chris work at the dairy, where they milk about 400 cows.
Johnson also points to a philosophy that he said has helped the dairy farm stay in business since 1946, when his father started.
“I guess about what covers my philosophy is that old saying about making for war in time of peace,” Johnson said. “When times are good, you’d better start preparing for something on the other side, and if it doesn’t come about, we’ve been fortunate.”
This past year, he said, “We’ve suffered more red ink in one year than I could’ve ever imagined that we would suffer.”
But the dairy business has always been up and down, he said, and the biggest danger won’t come until so many dairies sell out that supporting services also are lost.
Johnson has no doubt that some dairies will go out of business in this recession; at least one in Washington County has shut down in just the past few months. But he said his business will be one to survive.
In the past month, he said, the price of milk has gone up enough to let him start making up for recent losses, though price swings are still the norm and he expects another downturn is likely.
“You get mighty nervous when the milk gets this high because you know what’s coming after it,” he said. “For right now things are going good, so we hope it lasts.”
dmccown@bristolnews.com | (276) 791-0701
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