Top 10: Pierce County dairy farmers face a difficult year
Editor's note: This story is part of a series looking back at some of the biggest stories of 2018. Find the rest of the series here: Top Ten 2018.
Difficult financial conditions for Pierce County dairy farmers endured throughout 2018, with tariffs and low dairy prices cutting into profits — but the federal farm bill could bring some relief.
In September, the Herald reported on the county's dairy farmers, who discussed how a volatile milk pricing system, tight farming budgets and other issues are creating difficulties for area farmers. In the last months of 2018, the conditions changed little, but the federal farm bill, which President Donald Trump signed Dec. 20, includes reforms to a safety net program that are intended to better help farmers in market downturns and has provisions which hope to incentivize dairy sales.
"It's been horrible for all farmers this year, not just dairy farmers," said Paul Bauer, chief executive officer of the Ellsworth Cooperative Creamery. "People don't understand how difficult it is for farmers."
The industry has been hit by retaliatory tariffs by foreign countries like Mexico and Canada on dairy products, leading to profits dropping, Bauer said.
It's another strain on prices that are already in a four-year stagnation.
In 2014, dairy price per hundredweight were as high as $25. In late 2014 the prices started to plunge, and never rose above a $18.90 peak in January 2017. Through 2018 the prices ranged between $16 to $17.
Bauer said some farmers have left the business due to the conditions, however even that can be difficult due to high taxes on the sale of livestock.
"We have heard of people getting out, but then we hear the horror stories that they can't get out," he said. "It's a self-inflicted wound due to trade restraints."
There's hope though that several measures in the recently signed federal farm bill could help grow demand domestically, internationally and improve on government safety net programs, said John Holevoet, director of government affairs at Edge Dairy Farmer Cooperative.
The bill comes with changes to a much maligned federal safety net program called the Margin Protection Program for Dairy. The program was intended to help protect farmers from market downturns, but ended up being largely unsuccessful, Holevoet said.
A new, rebranded version of it called the Dairy Margin Coverage, offers new coverage levels, lowers premiums and a wider range of programs for differing farm sizes, he said. Other changes to the risk management segments of the bill allow for dual enrollment in different programs — with the MPP farmers could only be enrolled in that program and not others.
The new bill also provides MPP premium refunds for certain farmers, 50 percent in cash and up to 75 percent if used for DMC margins.
"We wanted to make sure that our farmers had as many options as possible," Holevoet said.
The bill also provides incentives for users of the Supplemental Nutrition Assistance Program to purchase dairy, and it provides for university research grants to explore non-consumption dairy product research.