The Maryland dairy industry may weather the worst drought in 30 years, but farmers in Carroll County and elsewhere cannot survive falling prices for milk, their main source of income, according to dairy officials.
Many producers report monthly losses of as much as $6,000 on milk shipped to processors, who attribute the drop to market fluctuations. With beef prices also dropping, farmers cannot rely on cattle sales to offset losses.
"A lot of dairy farmers would sell out, except the value of their cattle is so low," said Myron L. Wilhide, president of the Maryland Dairy Industry Association. "Many can't afford to stay in or get out."
The drought has exacerbated the situation for dairy farmers, who may get relief with the county's designation as a disaster area. The federal government will make low-interest loans available to farmers in Carroll and 16 other Maryland counties.
"We are seeing a major industry [damaged]," said state Del. Donald B. Elliott, a Republican who represents Carroll and Frederick counties.
Nearly 40 percent of Maryland dairy farms have gone out of business since 1988, and the number of processing plants has fallen from 35 to five in the past 20 years, according to the dairy association.
Wilhide, a fifth-generation farmer, worries more about low milk prices than he does about the 600 bone-dry acres he farms in Detour in northwestern Carroll. At 57, he has spent 40 years in business and has never been more uncertain about the future.
"I grew all my grain, worked, planned and invested this spring," Wilhide said. "I have spent three months watching my work and investments go down the drain. Now I have to invest more money that I don't have to buy what did not grow."
Quandaries
He wonders how he will buy grain for his cows when he is getting less than $13 per hundredweight of milk, down from $17 last year.
"The cost of milk production without a return of investment is $13.50 minimum [per 100 pounds]," he said. "We should get $15 to have any return at all."
Paul Sellers of Melrose has the same problem. He usually plants 500 acres of corn, enough to fill his silo and feed his 200 cattle all winter. In the spring, he sells the surplus to pay for the new planting.
That will not happen next spring. The drought has destroyed more than half his crop.
"Things are awful tight, and it will take a few years for us to come out of this," Sellers said.
With milk supplies more than adequate, increasing production will only drive prices lower. Price controls, similar to those in Virginia and Pennsylvania, might ease the situation, Wilhide and Sellers said.
Processors in the two neighboring states have the advantage of state-run committees that set the minimum milk price and guarantee a profit margin, Wilhide said.
Price controls
The Fairness in Milk Marketing Act, a bill to establish a milk commission in Maryland, failed in the General Assembly this year. The legislation would have allowed the state to set the minimum price for milk.
"Our interest is in a fair price to the producer, the farmer," said Elliott. "We need price controls over milk to compete with Pennsylvania and Virginia."
Without controls, Elliott said, he fears Maryland will lose an industry that generates about $180 million annually in farm sales.
"We can't save farmland if the farmer can't make a profitable living," he said.
Del. J. Anita Stup, a Republican who represents Frederick and Washington counties, sponsored the failed bill and plans to reintroduce it next year if she can marshal enough support.
A 40-cent increase in the price paid to farmers per 100 pounds would add about 3.5 cents to the cost of a gallon, Wilhide said.
Milk processors strenuously opposed the bill, saying consumers would bear the price increases.
"Many legislators had no feel for what the bill would have done," said Jimmy Vona, vice president for operations at Dairy Maid Dairy Inc. in Frederick. "They would have driven me out of Maryland to buy milk."
The drought has had little effect on processors, because milk production remains high, Vona said. He called the price-support systems in neighboring states weak. He expects Pennsylvania will soon discontinue the practice.
Vona prefers to work with farmers in the three-state area to establish fair prices for both producers and processors as an alternative to price controls. Most association members agree with him, he said.
Farmers are eternal optimists, but the economic climate is the most taxing it has ever been, Wilhide said. He just replaced cleaning equipment for his barn at a cost of $3,000 -- the same machinery cost $1,300 seven years ago. The price of milk was $17 in 1990 and is $2 less now.
"You can bet the price in the store is higher," said Wilhide. "The spread keeps getting wider."
Wilhide is plowing on, though. He scans the skies for rain and replants his fields, hoping to reap enough forage to feed 170 cows through the winter.
Pub Date: 8/17/97
