Not enough money in milk Farming: Drought in Central Maryland is driving already hard-pressed dairy farmers out of business. Cows and equipment are sold in an unhappy ritual for the owners.

November 02, 1997|By Jackie Powder | Jackie Powder,SUN STAFF

On a raw, foggy Saturday morning in October, Melba and Terry Hall watched stoically as an auctioneer sold the last of their Westminster dairy farm, piece by piece.

Spread out on fields behind the barn were hay wagons, tractors, fence posts, cow feeders and an array of smaller items, including buckets, milk cans, even a weather vane with a cow on top.

"It's a lifetime," said Melba Hall, 40, as she looked at the used farm equipment lined up for quick sale Oct. 25.

More than 150 people turned out for the grim ritual that has become all too familiar among Maryland dairy farmers.

The industry has steadily declined over the past decade, losing 40 percent of the state's dairy farms since 1988. But record low milk prices and the worst drought in 30 years have combined to force farmers out faster than ever.

"Things are at rock bottom," said Myron Wilhide, interim president of the Maryland Dairy Industry Association, a dairy lobbying organization established last year. "There are a lot of people scrambling to make ends meet, rearranging loans, extending paybacks. It's drastic."

In the past six months, 35 Maryland dairy farms have gone under, with the number of farms dropping from 911 to 876, said William Zepp, section head for the Hagerstown area with the state's Division of Milk Control, which regulates dairy farms. Typically, Zepp said, between 30 and 40 farms shut down in Maryland each year.

"It was quite a severe drought, and it couldn't have hit a worse part of the state," said Pat McMillan, director of intergovernmental relations for the Maryland Department of Agriculture. "The dairy section [Central Maryland] was already under considerable financial stress."

For a small dairy operation like the Halls', the pressure was too great.

Melba Hall was born and raised on the 143-acre farm, owned by her parents. The Halls' two sons, Wyatt, 12, and Zebb, 7, worked on the farm after school and in the summer. Their oldest boy, Zachary, 16, who drowned in June 1996, had looked forward to taking over.

But since 1990, the Halls have been losing money -- even with the money Terry Hall made working a full-time job as a tree trimmer.

"At the end of every month, I was $1,000 in the hole," Melba Hall said.

When the drought destroyed most of their hay and corn crops, the couple knew they could not buy the feed to get their 72 cows through the winter. Selling the herd was inevitable.

"I should have gotten out of it sooner, but I loved doing it," Melba Hall said. "No matter how much you think with your heart, eventually it hits you in the head."

Long before the drought, the economics of the dairy industry had many farmers thinking about quitting. Farmers say they're receiving 1982 prices for their milk, even though their production expenses have increased.

Milk prices hit a record low in July, when farmers received $12.42 a hundredweight, or $1.07 a gallon.

Phasing out

The low prices, combined with drought, helped push Lou and Karen Hobson out of dairy farming earlier than they had wanted.

The Hobsons were going to phase out Cowlick Farm, the dairy farm in Taneytown they've run for 26 years, over the next two years. In 1993, they opened Cowlick Gardens across the street from the farm, planning to develop the nursery business as an alternative source of income.

But last month, the Hobsons sold 50 cows of their registered Holstein herd, keeping 12 to sell in the spring.

Lou Hobson, 57, figures he would have had to borrow $60,000 to feed his cows through June. And he wasn't sure he would have the cash flow to cover the debt.

"It was a hard day to decide to sell the cows," said Lou.

"It was an awful day," Karen said.

Many farmers blame the dairy cooperatives, which buy their milk and market it to milk processors, as much as the drought for their problems. They say the cooperatives aren't fighting hard enough for higher prices from processors, who sell milk to grocery stores.

$25,000 for feed

"The co-ops keep telling us to get more efficient, but they come in here, and their field men drive big, fancy cars, and we read in the magazines that the co-ops are making money, but we don't get much of that," said Kenneth Zimmerman, a Frederick County dairy farmer who sold his 60 cows in September.

Zimmerman, 60, had planned to farm for five more years but said he wasn't prepared to spend $25,000 for feed to get his herd through the winter.

"If the price of milk had been up to $16, the drought wouldn't have bothered me," Zimmerman said. "I could have bought some feed. But when the price of milk is down, how are you going to pay for [feed]?"

The frustrations of area dairy farmers were clearly evident last month at a meeting sponsored by a grass-roots Wisconsin organization seeking to organize farmers into bargaining collectives to demand higher prices from dairy cooperatives.

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