CADILLAC — People drive by Benson Dairy LLC and think they must be rich, but what they don’t understand is how much it takes to keep their doors open, owner Jill Benson said.
There are 1,359 dairy farms of all sizes in Michigan which produced 11.2 billion pounds of milk in 2018, ranking the state sixth in the nation for milk production, according to a press release from Gov. Gretchen Whitmer’s office.
Phil Durst, a Michigan State University Extension senior educator, said Michigan was No. 1 in 2017 for milk production per cow. It continued this trend in 2018 at 26,340 pounds per cow.
Dairy is Michigan’s top commodity, supporting almost 80,000 jobs and contributing over $18 billion to the state’s economy, according to a press release from U.S. Senator Debbie Stabenow’s office.
However, the current dairy economy isn’t good for farmers because they produce a lot of milk.
In fact, they are producing more milk than can be processed in the state and sometimes it has to be processed out of state, which increases travel costs, Durst said.
Recent market and trade instability has hurt Michigan’s dairy industry, causing many family dairy farms to take on additional debt or even go out of business.
Michigan lost 230 dairy farms last year, the highest percentage of any state, according to Stabenow’s release.
Cadillac area farmers cut down costs, try to find new business avenues
To say it’s challenging to be a dairy farmer is an understatement.
“Dairy farms are closing their doors every day,‘ Benson said.
At Benson Dairy LLC in Cadillac they milk around 240 cows currently and have just over 400 animals total.
And that costs some money. Running a farm takes electricity, feed, fuel. There’s the overhead costs for the equipment and buildings. There are repair costs, employee costs, fuel costs, fertilizer, feed, chemicals and veterinarian bills.
“I could go on and on down the list of who I have to pay,‘ she said.
Unexpected things happen too, like a barn fire they had last year and an illness that swept through their herd from 1996 to 1997.
This year it’s been the weather. Right now getting the hay dry and corn in the ground has been challenging and everything’s behind.
“We can’t change the weather,‘ Benson said. “We can’t change God things.‘
There’s no way to alleviate the stress as they’re down to bare bones and can’t afford to get new equipment, so they fix what they’ve got. When they rebuilt the barn after the fire they upgraded their milking facility to get robotic milkers to help cut down on labor costs.
“Every day it’s looking at what we can do to be more efficient and cutting down costs that we can,‘ she said.
And at the end of every day they hope they can pay most of their bills, she said.
Nick Brinks over at Ber-Sher Farm in McBain also said the dairy economy is tough and takes a toll emotionally.
This spring has been so tough on top of already low prices, and it’s not cheap to take care of the animals.
They milk 200 cows but probably have 550 dairy animals on the farm in total. They also have about 20 wagyu cattle. They spend around $5.46 per cow per day to feed them. So to feed 200 cows costs around $1,092 a day.
Not a lot of people do smaller farms anymore and it feels like there are more mega-farms. It almost feels like they’ll be the next to go out, he said.
So they are finding different niches to stay in business rather than getting bigger, like adding a creamery to their farm.
“We’re trying to put our own fate in our own hands that way,‘ Brinks said.
The farm is currently working on getting its creamery, Brinks Family Creamery, up and running but offer seven different types of cheese curds which can be found at Thirsty’s Elmrest Party Store and Willow Market and Meats in Cadillac.
They still have to finish the driveway to the creamery but they will have an open house when it is finished, hopefully sometime in July, Brinks said.
Brinks said after they get the creamery going and are doing better financially they want to put in robots for the milking like Benson’s and other farms in the area.
He hopes things will get better, but he doesn’t really know. After getting the creamery going he thinks their chances will be better.
U.S. and Michigan farmers struggling
Two counties in the Upper Peninsula will no longer have milk production after the closure of two dairy farms.
The Johnson Dairy Farm in Baraga County stopped production earlier this month and the owners of Rolling Acres farm in Houghton County expect to sell all of their milking cows by the end of July, The Daily Mining Gazette of Houghton reported.
Gary Palosaari took over Rolling Acres in Chassell Township from his parents in 1992. He said the farm kept losing money because of years of low milk prices and high costs.
“You think you can ride it out, but then the hauling costs got so extremely high,‘ he said. “We’re paying a ridiculous amount of hauling because there’s not enough milk. Then when money’s tight, you can’t pay labor like you should, so everything falls on each other.‘
According to U.S. Department of Agriculture data, 6.5% of the nation’s dairy farms closed in 2018.
“Dairy farmers can’t pay their bills with the price of milk we’ve been getting,‘ Benson said.
Farmers export the milk of one of every seven cows, but exports are also hampered by the current situation with the tariffs with Mexico. Michigan sends a lot of milk to Mexico and the situation with China has impacted farmers’ ability to send product there, Durst said.
Low milk prices aren’t helping the dairy economy, and feeding the 9 million U.S. dairy cows requires millions of acres of crops and accounts for more than half of total dairy farm costs, according to a Michigan Farm News article.
MSU researchers are currently trying to decrease that cost. By reducing the cost of producing milk, it will help farmers better “survive and thrive in this climate,‘ Durst said.
The future of the dairy industry
The Foundation for Food and Agriculture Research awarded MSU a $1 million grant to improve dairy cow feed efficiency. The Council on Dairy Cattle Breeding provided matching funds for a total award of $2 million, according to Michigan Farm News.
Food efficiency is a main determiner in farm economics because food represents the most significant cost in producing milk, Durst said.
So if farmers can become more efficient in turning food into milk then it will take down the costs for farmers.
Michigan’s dairy farmers can now also sign up for affordable benefits through Dairy Margin Coverage. The program provides improved support for dairy farmers facing financial uncertainty, according to Stabenow’s press release.
Michigan dairy farmers can go into their local Farm Service Agency office and sign up for the new coverage for 2019. Farmers that take the option and sign up for a full five years of coverage will get a 25% discount on their premiums.
The new program is flexible, offering options that will work for any size dairy farm, according to the press release.
“Michigan’s dairy industry is a critical part of our agricultural economy that has experienced tough times for far too long,‘ Stabenow said. “Signing up for the new-and-improved coverage will help our dairy farmers weather financial uncertainty and recover from losses outside of their control.‘
Despite the challenges, Michigan farmers are “blessed"
Even though it’s challenging, Benson enjoys everything about working on a dairy farm.
The sound of the calves in the barn and the sight of a newborn calf make it worth it. It’s an amazing place to live and they’re hoping to get their grandkids involved in it.
They’re fourth generation farmers and in the process of handing it off to the fifth generation. The grandkids would be the sixth generation.
Overall it’s a hard place to be, but they are so blessed to be able to raise kids and have the opportunity to work the land and God’s creation, she said.
Durst said the people in the dairy industry in the state are simply “great.‘ Not better, great.
It’s not just the producers but all the people who work with them.
“It takes a team,‘ he said. “And we’ve got great people here in Michigan doing dairy.‘
-The Associated Press contributed to this report.