US dairy policy drives small farms to "go big or go out" as monopolies get rich (2023)

Two decades of misguided US dairy policies focused on increasing milk production and export markets have hurt family farms and the environment while enriching dairy lobbyists, according to a new study. agribusiness and corporations.

The average American dairy has only turned a profit twice in the past two decades, yet milk production has increased by nearly 40%, according to a Food and Water Watch (FWW) analysis provided exclusively to The Guardian.

More milk has not translated into higher profits for most farmers, or lower prices for US buyers, because production costs have risen while milk prices have remained low, allowing exporters Americans compete in the world market.

In the past 20 years, US dairy exports have grown eight times, more than almost any other product, coinciding with rapid industry-wide consolidation.,according to the FWW report.

The US Dairy Export Council (USDEC) says export growth has helped farms of all sizes, but two-thirds of family-size commercial dairy products are they lost between 1997 and 2017 when factory farms, exporters and a handful of powerful cooperatives dominated the industry. dairy products. Trade association executives earn high salaries while ordinary farms perish.

Dairy monopolies are also bad news for the climate. While cow numbers are holding steady, planet-warming methane emissions from dairy manure have more than doubled since 1990, thanks to the way factory farms handle waste, according to the FWW report.

It warns of a vicious cycle in which economic difficulties due to low and volatile milk prices are driving family farmers "up or out." In other words, the only way for many ordinary farms to survive is to expand their herds and factory operations that increase greenhouse gas emissions and threaten air and water quality, or sell to mega-dairies that do the same. .

The chart shows the decline in profitable years for US dairy farms.

Reducing overproduction is critical as current state and federal dairy policies are driving family farms to extinction while fueling the climate crisis, according to the FWW report.Economic costs of food monopolies: the dirty dairy business.

"The big picture of the economic cost of milk consolidation is that it's a story filled with incredibly orchestrated and devastating loss and hardship for farmers and a deteriorating environmental outlook," said Rebecca Wolf, FWW food policy analyst. "But it hasn't always been this way, and it doesn't have to be this way...we must reject the wrong solutions and instead reform policies to support America's farmers, the environment and the economy."

Consolidation in the US dairy industry has been faster than any other agricultural sector except egg and hog production. This is happening both at the farm level (fewer farms, more mega-gray factories) and at the processing level (fewer but more large companies and cooperatives that buy, process and market dairy products).

Nationwide, the total number of US dairy farms fell by more than half between 1997 and 2017, while the average number of cows per farm increased by 139%, according to a USDA data analysis. More than 70% of US milk is produced on farms with at least 500 cows, and the largest dairies have herds of more than 25,000.

Larger farms graze their cattle less and rely instead on purchased feed, the biggest source of greenhouse gases from industrialized agriculture. In addition, industrial agricultural fertilizers store manure in a liquid form, which promotes methane release, unlike farm livestock, whose manure decomposes with minimal emissions.

Bar chart of decreasing number of dairy farms and increasing average number of cows per farm

Methane is a short-lived but potent heat-trapping gas that is importantfor about a thirdthe increase in global temperature since the pre-industrial era, andalmost 45% of heatingtoday. Livestock, through cattle burping, manure management, and fodder cultivation, are responsible for this.almost a thirdof global man-made emissions.

As scientists have warned about the disproportionate role of industrial agriculture in global warming in recent years, agribusinesses, including dairy, have focused on this.industry-driven untested fixes such asCarbon offset markets and feed additives to reduce methane levels in cow burps, instead of addressing the main problem, which is industrial farming of large herds.

One factor driving the consolidation of dairy farms is declining yields.

Farmers struggled to break even as production costs rose faster than milk prices, which were slightly lower in 2021 compared to 2000. This is partly due to a major change in dairy policy. from the US milk that would be donated or resold to deal with the oversupply, to one that encourages production and expands export markets.

The policy change, which includes promoting dairy products in developing countries, has helped the US become one of the world's largest exporters of dairy products. As exports increased, so did price volatility, and to remain competitive, US milk prices remained low.

"This lined the pockets of agribusiness while farmers were locked into volatile international markets... Clearly, export-oriented policies have not improved the welfare of the average American dairy farmer," according to the FWW report.

The dairy industry, which includes individuals and PACs associated with farmers, manufacturers and cooperatives, contributed $5.1 million in federal campaign contributions during the 2020 election cycle.Laut's Open Secrets, the protector of transparency. That same year, the industry spent $6.9 million trying to influence Washington and campaigned hard to protect corporate subsidies, among other Farm Bill benefits.

“The urge of our political and industry leaders to grow or die has come true, and allowing that approach has resulted in the demise of small and medium-sized farms, and has had a devastating impact on rural communities across the US. said Sarah Lloyd, a dairy farmer in Wisconsin who helps run the medium-sized family farm with 450 cows. "Farms that have been idle for a hundred years can't stay afloat because of this system of ups and downs and it opens up more room for consolidation... It's a vicious cycle."

An area chart of increasing milk production per cow

In the past 20 years, rising debt and bankruptcy have been linked to farmer suicides and rural population declines. “We cannot get out of this problem through export or consumption, we need policies to better manage supply to reflect real demand so dairy farming can once again become a viable livelihood,” Lloyd said.

But dairy farmers are forced to pay for agricultural plans that go against their interests. The FWW estimates that between 2005 and 2018, dairy farmers invested approximately $4 billion in the mandatory Dairy Checkoff program, which funds campaigns that bring America's milk, butter, and cream to consumers and fast food companies, mainly mega dairies.

Statewide, at least $75 million of New York taxpayer money has been funneled into a handful of corporations and cooperatives over the past 20 years, with the promise of a few thousand jobs, some of which were quickly lost when the dairy closed. .

A spokesperson for the USDEC, which is funded primarily by the Federal Accounts Program and the USDA, said it is focused on expanding exports "on behalf of dairy farmers of all sizes across the country and is driven by the fact that that export sales help strengthen farms. operating prices…the current federal dairy safety program is an insurance scheme that allows dairy farmers to mitigate the effects of price fluctuations.”

"The industry prides itself on its commitment to sustainability" and is on track to meet its 2050 goals of net zero emissions and better water management, the spokesperson added in a statement.

Agriculture Secretary Tom Vilsack was named USDEC CEO after leaving the Obama administration, where he was rumored to be.earned over $900,000by 2020: more than 3,000 times median farm income. Since he returned to the USDA under Biden, Vilsack has continued to prioritize expanding US agricultural exports.

A USDA spokesperson said it has implemented a range of new financial and technical supports for small and medium-sized farms, including organic dairy, which currently accounts for 2% of milk production, and is working to create more competitive markets and strengthen local markets. and regional food systems under the Biden-Harris administration. "Together, these actions will help ensure that small and midsize manufacturers have more, new and better revenue opportunities to take advantage of to strengthen their bottom line, get a fair return on their products and combat consolidation."

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