Cows graze in Tazewell County. One dairy farm a week has closed in Virginia this year. (Josh/Flickr/Creative Commons 2.0)
Cline Brubaker bought his dad’s dairy farm in 1967, but he has no plans to entice his own children into the family business. He shut down his farm in October after more than 50 years of milking cows and plans to begin selling off his land.
“I haven’t made money since 2009,” he says via phone from his home in Franklin County, where he serves as chairman of the Board of Supervisors. “I don’t want my family to farm.”
Brubaker is far from the only dairy farmer in Virginia who struggled to make the business work amid falling milk prices, oversupply and growing trade pressure. In the first half of this year, dairy farms in the state closed at a rate of more than one a week.
The industry has been struggling for years, but the past two years have been particularly bad, with the total number of licensed farms dropping 15 percent since 2016, leaving 552 as of June.
“It has continued to escalate,” said Elaine Lidholm, a spokeswoman for the Virginia Department of Agriculture and Consumer Services.
A ripple effect in the local economy
When the farms close, the economic impact ripples through the community. A 2015 study by UVA’s Weldon Cooper Center found that just under 8,000 people were directly employed in the dairy industry, which supported another 4,000 indirect jobs.
“People see the farms and they’re kind of in the background, but these are real drivers of the economy,” says Eric Paulson, the executive director of the Virginia Dairymen’s Association, noting the farms support feed companies, service companies, veterinarians and other small businesses.
When they close, farmers typically sell their land, which more or less functions as their retirement savings in an industry without pensions or much in the way of profit.
“Some might transition to another crop like beef, but the closer they are to population centers, that land’s going to be divided into subdivisions,” Paulson says.
Milk prices keep dropping
Medium-sized dairies like Brubaker’s, which had about 80 cows at its peak, have been especially hard hit. Lidholm says small dairies are better able to weather the tightening labor market because they tend to be family businesses without outside employees, who are commanding higher wages as the economy has improved.
Small farms also often grow secondary crops, which cushions against the unpredictability of milk prices.
Meanwhile larger dairies benefit from economies of scale like robotic milking and feeding and often buy cows from the dairies that are going out of business.
Experts say there are a number of factors at play, but they all come down to milk prices, which just keep going down.
American farmers struggle to compete in the international market with countries like New Zealand, which are able to produce milk much cheaper.
(The last time prices for U.S. milk spiked was in 2013 when a drought hit New Zealand. The impact was only temporary.)
Canadian milk loomed large in NAFTA negotiations earlier this year, but the general consensus in Virginia is that the final agreement didn’t do much to improve the situation.
Meanwhile, domestic consumption of fluid milk continues to drop, contributing to oversupply issues within the industry.
Is cheese the answer?
There is a bright spot: demand and prices for processed dairy products like cheese, yogurt and butter is increasing.
But Virginia farmers have limited access to that market because there are no large scale processors in the state.
“Virginia’s dairy economy is based on fluid milk, and that has hurt Virginia in particular,” says Jeremy Daubert, one of two Virginia Cooperative Extension Agents in the state who work with dairy farmers.
The state has commissioned a study to determine the impact and feasibility of luring a large-scale processor to Virginia, a possibility the industry is watching closely.
“Cheese and butter are both at decade highs,” Paulson says. “People are eating more of it, but unfortunately, here in Virginia, that’s not what we’re set up for.”
In the near-term, some struggling farmers have seen success launching onsite dairy processing facilities. Homestead Creamery in Franklin County is often cited as a success story. The farm now distributes its milk, ice cream and butter around the state.
The local operations can then be leveraged into an agricultural tourism business with attractions like farm stands and cafes.
“Selling directly brings in more cash than selling wholesale,” Lidholm says.
Processing requires skill, equipment
But it’s not for everyone: Turning milk into cheese, butter or ice cream requires skill and expensive equipment that most farmers don’t have. And even if they do, they need marketing acumen to get it into stores and convince people to purchase it.
Also, turning a farm into a tourism destination requires the farm to be at least somewhat close to where tourists already are.
Even in the right spot, there are still pitfalls.
“Some people are very good at working with animals and not very good at working people, and if you’re not good at working with people, it’s hard to build a business centered around working people,” Daubert said. “It’s a common problem.”
Brubaker, 74, said he’s just glad he’s old enough to retire from the business. And he doesn’t encourage young people to pursue his former line of work.
“There are some areas of the country where there are suicide hotline numbers and they’re passing them out to farmers,” Brubaker says. “I have told some young people that want to come talk to me about the business, I tell them, you don’t want to. My eternal optimism is at the bottom of the bucket.”
Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our web site. Please see our republishing guidelines for use of photos and graphics.