Mass. Dairy Farmers Series

America's increased appetite for ethanol is contributing to the hardships of the Massachusetts dairy farmer. Demand for ethanol is driving up the price of corn, a staple of dairy cows. It's just one factor that is squeezing dairy farmers caught between the soaring costs of feed, fuel, and fertilizer, and the low price they get for their milk. As many of a third of Massachusetts' dairy farmers could go out of business this year. In this first part of our two-part series, WBUR's Fred Thys takes us to one dairy farm in Egremont.

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FRED THYS: On the Proctors' farm, the cows get a lot of individual attention. In the farm office, for instance, there is a playpen. Charles Proctor doesn't even notice it any more.

CHARLES PROCTOR: Oh, that?

RHETT PROCTOR: Calves.

CHARLES PROCTOR: Newborns. On real cold, cold days, we bring'em in here, get'em warmed up dried out before they go to their individual hutches.

THYS: Proctor bought his farm in 1958. He moved from Lunenburg, in Central Massachusetts, where his parents and grandparents had farmed, to this farm in Egremont, on the New York border. Before we can begin touring the farm, we have to put plastic boot covers on.

CHARLES PROCTOR: Throw these away when you leave, and you won't take our germs to the next farm.

THYS: The Proctors learned early on how costly an infected herd can be.

CHARLES PROCTOR: Five years after we bought the place and moved, we bought in a disease from bought cattle, and we had a real rough year.

THYS: That was the first time they ever had to borrow money just to cover their operating costs.

We walk past hutches that look like big plastic doghouses. This is where the youngest calves live.

CHARLES PROCTOR: This is where they start. Individually. So if one gets sick, they can't pass the disease through the whole group.

THYS: One of the calves has a blue blanket strapped on to keep it warm. Soon the calves move out of the individual hutches.

CHARLES PROCTOR: Move up to what we call the super hutch here, where they begin to get involved in socializing with the other kids and stuff.

THYS: The average Massachusetts dairy farm has 80 or so cows. The Proctors have slightly more than that, 130 cows of milking age, plus another 100 younger cows, calves and heiffers.

Their herd is half Jerseys, half Holsteins.

So which ones are the Holsteins, and which ones are the Jerseys?

RHETT PROCTOR: Holsteins are the black-and-whites, and the Jerseys are the brown.

THYS: That's Rhett Proctor, Charles' son. He's proud of their champion Jerseys.

RHETT PROCTOR: Right now, the Jerseys are ranked nationally top ten both in milk, fat and protein production, all three, basically, so they've been number one for fat for the last two or three years, and Holsteins seem to pull their own weight, too, but they're just kinda here.

THYS: The Proctors clearly enjoy what they do.

CHARLES PROCTOR: But finances have been really, really tough this last year. When you have to start borrowin' money to just pay operating, that's not a good situation.

THYS: Charles Proctor says this is the only third time they have ever had to borrow to pay operating costs. The first time was when they bought the diseased cattle. They had to borrow again when they built their big free-stall barn, but the Proctors says they've never had to borrow this much. Part of the bind they're in is caused by the price they get for their milk: it's only a third of what consumers pay.

RHETT PROCTOR: 8000 pounds we shipped out of the bulk tank this morning, it's worth about a thousand dollars to us. At the retail level, it's worth over 3000.

THYS: Massachusetts farmers are getting $1.14 a gallon for their milk. They need $1.55 a gallon to break even.

RON COTTERILL: It all has to do with the way milk prices are set in the far West.

THYS: Ron Cotterill is director of the Food Marketing Policy Center at the University of Connecticut.

COTTERILL: Milk prices in this country, at the farm level, are entirely political. They are not set by supply and demand in any kind of rational market, and the political aspect of the determination of prices has put tremendous power into the hands of one very large dairy cooperative, Dairy Farmers of America.

THYS: Milk prices are administered by the federal government, and they're based on contracts made on dry milk powder. Cotterill says the Dairy Farmers of America are locked into huge contracts with a New Zealand company at a very low price, and that's dragging the price for other milk products down. Since 2005, the price of milk that farmers get has dropped by 19 cents a gallon. A farm like the Proctors produces about 175 000 gallons of milk a year, so that's 33 000 dollars a year less that they're making. Charles Proctor says the temptations to sell are strong.

CHARLES PROCTOR: This is a high-rent district, so to speak. There's a house on eleven acres that sold three quarters of a mile North of here. It sold for $2.1 million. Land values are runnin' right around $50 000 an acre for our land. Tough to farm when you could turn 285 acres at over $35 000 to $50 000 dollars an acre.

THYS: Proctor says they get a couple letters a year from developers wondering if they would like to sell some or all of their land, but they say no.

CHARLES PROCTOR: We like what we're doin'. It's a lotta hours, and it's actually a lotta work, but I enjoy it, and I think Rhett enjoys it.

THYS: The Proctors' is one of two dairy farms left in Egremont. It's on a hill and has glorious views of the Berkshires. The Proctors' and the other dairy farm in town cover 1000 acres. Rhett Proctor argues that they provide a tremendous benefit to the community.

RHETT PROCTOR: And of course, all this open land is quite a bit for wildlife habitat, water recharge, air quality.

THYS: Charles Proctor recently signed a petition along with most of the dairy farmers in Massachusetts asking the Commissioner of Agricultural Resources to declare an emergency for farmers.

If an emergency is declared, one option is to raise the price that consumers pay. But Kent Lage, the Deputy Commissioner of Agriculture, says setting a minimum price could pose constitutional problems.

KENT LAGE: We're concerned that that may affect interstate commerce, because a fair amount of milk consumed in Massachusetts, the vast majority of it, actually, comes in from out of state, and so there's concerns about the interstate commerce clause.

THYS: The United States Supreme Court has ruled that Massachusetts may not raise the price of milk from other states in order to benefit local farmers.

The Proctors say they'll stay in farming as long as they can, but they're only willing to mortgage their equipment and their champion cows. They won't mortgage the land. The Proctors say they'll decide this fall whether to stay in the dairy business.

For WBUR, I'm Fred Thys.