Dairy Farmers' Revolt: No Tears Over This Spilled Milk

(July 1) -- Here's something to think about as you pour that pure white liquid over your morning cereal: America's milk supply is in crisis. Dairy farmers across the nation are struggling with prices too low to cover their production costs, raising worries that if action isn't taken, thousands of them could go out of business.

Among those feeling the pinch are David and Robin Fitch, who milk 150 cows on 400 acres in New York state. They figure they've lost more than $100,000 on their operation in the past year alone. And unless Congress sets a milk price floor of $18 per hundredweight (about $1.55 a gallon), they say, they'll lose the farm that's been in their family for five generations after this fall.

So in a dramatic bid to call attention to their plight, the Fitches are calling for dairy farmers across the country to dump their day's milk production in a symbolic protest on the Fourth of July.

"We have gone to Washington and told them our story of our desperate situation, and it has fallen on deaf ears," Robin Fitch told AOL News.

The rise of big corporate dairy farms in the 20th century has put the squeeze on mom-and-pop operations like the Fitches': In 1970 there were about 648,000 dairy farms in America; by 2006 that number had dropped 88 percent, to 75,000. The small remaining farms were hit hard by the recession, and the support organization Farm Aid estimates that the average dairy farm is now losing $200 per cow every month.

The situation has taken a heavy psychological toll. Farm Aid reports that calls to its crisis hot line increased by 500 percent last year, nearly all from dairy farmers, and last year the agricultural community was troubled by a rash of farmer suicides.

Pete Hardin, who publishes industry newsletter The Milkweed from his farm in Wisconsin, told AOL News that many dairy farmers are just teetering on the brink.

"Farmers have borrowed to the max, cannibalized cash savings," Hardin said. "We've got a lot of hardworking folks producing who are right on the verge of seeing themselves and their neighbors lose everything."

Small Farms vs. Big Players

Many farmers blame their dire straits on unfair and anti-competitive practices in the market, noting that while the prices they received have plummeted over the past two years, the cost for consumers has remained the same.

Two big players in the market that have drawn farmers' criticism are the Dairy Farmers of America (DFA), the nation's largest dairy co-op, and Dallas-based company Dean Foods, which buys from the DFA. Small dairy farmers have noted that as they continued to struggle with low prices throughout 2008, Dean Foods was posting record profits.

Farmers like the Fitches believe that the government has failed to prevent companies like Dean from controlling the market. But Washington has not been entirely unresponsive: Over the past few months, the departments of Justice and Agriculture have teamed up to hold a series of antitrust workshops examining consolidation across agricultural sectors, and in January the DOJ filed an antitrust suit against Dean Foods.

Dean has countered by saying it is not responsible for setting prices -- the government is.

"The system is broken, and all of us -- farmers, processors and retailers alike -- are paying the price in one way or another," Dean said in a statement for last Friday's antitrust hearing, according to The Associated Press. "We share dairy farmers' frustration with the increasing volatility in milk prices."

Dean also blames overproduction for the recent low prices, though analysts like Hardin point out that U.S. dairy imports have been rising in the past few years.

Still, for farmers facing foreclosure, antitrust measures may offer too little, too late. The next chance to make legislative changes to pricing systems will be in 2012, when the farm bill comes up for renewal in Congress. Many farmers worry they aren't going to be able to hold on that long.

To Dump, or Not to Dump

The Fitches say their phone has been ringing constantly from consumers and producers showing their support for the Fourth of July milk dump, and they're expecting farmers in at least 15 states to participate. But others are less willing to give up income when they need it the most -- and some doubt whether or not the publicity stunt will have a big enough impact.

Hardin recalls that his great-grandfather successfully organized farmers in New York state to shut off the flow of milk to New York City for three weeks in 1916, and won higher prices for their products. But he worries that sort of tactic hasn't worked in this country for 90 years.

Jerry Harvey, a dairy farmer in Wisconsin who has organized rallies in the past, told AOL News he isn't sure if he's going to participate in the milk dump.

"I'd pull that handle in a heartbeat," he told AOL News, but adds he'll do it only if he thinks the other farmers are united.

"Right now we've struggling to pay our bills, and that's another 500 bucks down the drain," he said.