As I have mentioned in previous posts, the dairy industry is an extremely lucrative component of New York State’s economy, especially in St. Lawrence County, which is the state’s second largest dairy producer. Within the last thirty years, however, the industry throughout the entire U.S. has undergone drastic changes that have reverberated throughout New York State in general and St. Lawrence Country in particular. In the late 1980s, New York began deregulating the dairy industry by eliminating New-Deal-era regulations that had protected local milk processors. Consequently the state has lost nearly two-thirds of its dairy farms since the 1980s and the ones that remain have expanded. In this post I provide an overview of these changes, all of which provide the context for an upcoming post that will feature the voices of North Country dairy farmers. [Photo courtesy of Martha Cooper/TAUNY]
According the “The Economic Cost of Food Monopolies,” a report published by the organization Food and Water Watch, between 1982 and 2007, St. Lawrence County alone lost 77% of its dairy farms and the remaining farms tripled in size from 43 to 120 cows. Such deregulation and consolidation have enabled out-of-state milk processors to enter New York markets. This has led to the growth of large industrialized farms, or “mega-dairies,” as market control has been placed in the hands of very few large corporations that have gained increasing control over the processing and marketing of milk. Alongside this augmented market control by out-of-state firms and the establishment of larger, more industrialized and mechanized farms, money and jobs tend to leave rather than stay within the local community as supplies are purchased elsewhere and profits are shared with other players on the corporate supply chain.
Furthermore, in the dairy industry, milk is not usually sold directly from farmer to consumer, but is first sold to a cooperative or milk marketer, which then sells the milk to a processing company. Prior to such extensive corporate consolidation, many farmers were members of independent, local cooperatives and had their own processing plants, which gave farmers more control over their milk prices and profits. However, as a result of consolidation, between 1940 and 2007, the number of independent dairy cooperatives dropped from 2,300 to 155 due to the growth of privately owned processing companies. Currently most farmers are members of the largest cooperative, Dairy Farmers of America (DFA) or market their milk though Dairy Marketing Services (DMS), which is a milk marketing partnership between DFA and Dairylea Cooperative (based in New York). Moreover, between 1972 and 1992 the number of processing plants decreased by 70%, and again by 35% from 1992 to 2007, while the average size of remaining plants doubled.
By the early 2000s, the processing company Dean Foods had gained control over 70% of the Northeast’s milk processing and its sole suppliers of milk were DFA and DMS. This highly consolidated and tightly controlled market has stripped dairy farmers of their control over milk prices as well as their own profits because there are very few opportunities for negotiation regarding the prices at which they sell their milk to DFA, DMS, and Dean Foods. Especially due to the perishability of milk, farmers are often forced to accept whichever price they are offered. On top of these economic challenges, although Federal Milk Marketing Orders regulates the price that farmers receive, the equation that is used to calculate this price does not take into consideration the cost of production, which subsequently has forced farmers to minimize labor costs by hiring migrant workers, who are often far more reliable and willing to work on the farms than domestic workers.
All of these changes have had an immense impact on dairy farmers in St. Lawrence County. In my next post I will share some testimony from farmers who participated in a local project coordinated by Traditional Arts in Upstate New York (TAUNY).