FREDERICK (AP) — Charles Brandenburg has operated a dairy farm for 50 years and is still in business, but many in Frederick County’s leading agricultural industry have not been so fortunate.
Nearly 40 percent of Frederick County’s dairy farms went out of business in the last 10 years, according to the county’s economic development office.
Local farmers such as Brandenburg said the high cost of being in business combined with a depressed economy have caused local dairy farmers to exit the industry.
“Fuel is high, electricity is high, and gas and diesel are way out of proportion to the money we make,” said Brandenburg, owner of Char Mar Dairy Farm Inc. in Jefferson.
“Combine that with freight, labor, parts and repairs and the fact that the dairy farmer has no control over the price for the product he produces, and you see why we’ve lost a lot more farms than what it used to be.”
Dairy farms in Frederick County have dwindled from 1,225 farms and 47,507 cows in 1959, to 107 farms and 14,500 cows in 2011.
The trend in the decline of the dairy farms has been relatively the same for nearly 50 years now, said Colby Ferguson, the county’s agriculture development specialist.
“However, it wasn’t until the 1990s that the decrease in the number of dairy cows started to rise,” Ferguson said. “So up until the 1990s, many dairy farms were selling their cows to their neighbor and the cows were staying in production in the county.”
The loss of farms coupled with fluctuating milk prices is a trend that will continue over the next five years, Ferguson said.
“If so, that would put Frederick County at 90 active dairy farms in 2016,” Ferguson said.
Ferguson said milk prices have been volatile for several years now, making it difficult for a dairy farmer to properly budget each year.
“Many dairy farmers have sold the cows but have kept the farm and continue to farm the ground,” Ferguson said.
Many also raise corn and soybeans for the cash market and are doing well since the prices of both grains continue to hold at record high values, Ferguson said.
“Unfortunately, the farmers who continue to dairy farm continue to see the cost of production rise without the price of milk rising,” Ferguson said.
“My feeling is that there will continue to be dairy farms selling out as more viable options arise or the farm changes owners.”
Local dairy farmers have lost equity over the past four years, University of Maryland Extension Frederick County Dairy Science Agent Stanley Fultz said.
“Our local dairy industry has been steadily declining over the past several decades, and I see it continuing to do so as Frederick County land continues to be developed and as the population increases, putting further pressure on land use,” Fultz said.
As milk prices continue to erode over the next few months, additional farmers will leave the dairy business, Fultz said.
Last year, dairy farmers had a 4 percent over year loss in fluid milk sales, but the average loss is 1 percent every year, which poses a serious problem for the industry, said Jimmy Vona, co-owner of Dairy Maid Dairy. Dairy Maid Dairy is a milk-processing company in Frederick that bottles about 75,000 gallons of milk a day and delivers milk to states in the Mid Atlantic region through a network of distributors.
Vona said the price of milk is a highly regulated program set by the Federal Milk Administration.
To remain profitable, dairy farmers need to maintain the necessary margins between production costs and milk prices, Fultz said.
“Since they have no control of milk price, they need to be sure their costs are in line with resulting production per cow,” Fultz said. “We often hear of the need to cut costs, but some costs cannot be cut without sacrificing production.”
Vona described milk as a near perfect food that needs better marketing.
“For whatever reason, drinking milk is not cool for teenagers today,” Vona said. “They’re drinking everything from vitamin water to you name it, but not milk, and we end up with a generation of Americans with osteoporosis and no protein.”
The industry has done a poor job marketing itself, Vona said.
Because Maryland is an expensive state for dairy farming, the option to sell their farm to developers becomes more appealing to dairy farmers, Vona said. Or, dairy farmers will relocate to states where they are treated better, make a little more money and operating cost is not so high, the businessman said.
Maryland has about 500 dairy farmers; Pennsylvania has 5,000 and the numbers are higher in Virginia and New York, Vona said.
Dairy farmers are traditionally slower to exit the business than many other agricultural businesses because of the required capital investment for land, cattle and machinery, Fultz said.
“It is harder to liquidate these assets and equally difficult to re-acquire the assets to return back to milk production, so many times they try to ‘ride out the storm,”’ Fultz said.
There will be dairy farms in Frederick County for many years to come as top managers continue to make the necessary changes in production practices to ensure profitability, Fultz said.
Some farmers will do this by adopting more labor-efficient practices such as automated milking systems, including robotic milkers. Others will increase herd size to gain additional economy of scale or reduce herd size and modify production practices to allow the family to handle daily chores without hired labor, Fultz said.
Brandenburg milks 700 cows.
“For somebody to start up a dairy farm now is impossible,” Brandenburg said.