This story was updated at 3 p.m. on Feb. 4, 2014.
Some much-needed aid could come to Montgomery County’s shrinking dairy industry with a bill that Congress approved on Tuesday.
David Weitzer of Poolesville has worked his family’s dairy farm for 60 years. In addition to dairy cows, his farm has 500 acres where he grows crops such as corn and soybeans.
Weitzer said business has been been difficult for dairy farmers recently because the price of grain — and therefore, feed for cows — has been high. Those prices drove profit margins to little or nothing.
“It’s been tough on the dairy end,” he said. “Grain gives me some balance.”
The Agriculture Act of 2014, commonly referred to as the “farm bill,” proposes changes to food and agricultural policy that would be effective for the next five years.
If the farm bill becomes law, a program that provides subsidies to farmers, regardless of need, would be eliminated. Much of the funding allocated to that program would instead be invested in crop insurance and risk mitigation programs.
The U.S. House passed the farm bill on Jan. 29 and the Senate passed it on Tuesday. The legislation will go to the president for his signature.
Currently, the federal government directly pays dairies when the price of milk falls below a fixed minimum. Under the new legislation, dairy farmers would have the option to buy an insurance policy that would pay out when high feed prices push profit margins below an established threshold.
The margin is calculated by subtracting the average feed cost from the price of milk. Farmers would buy insurance for a specific margin.
Jeff Semler, an educator for the University of Maryland Extension, said a similar system has been in place for crop farmers, but not dairy farmers.
“If the price of milk drops below production costs, you just take a hit and hope for the best,” he said.
In a statement, Maryland Farm Bureau President Chuck Fry said the organization is pleased to see more federal support for farmers, whose livelihoods are heavily influenced by market forces. The improvement to insurance and loss protection are good for Maryland farmers, he said.
“Farmers are price takers, not price makers,” Semler said.
Jeremy Criss, Montgomery County’s agricultural services manager, said business can be difficult for dairy farmers who sell to co-ops.
“The price you get is pre-established,” he said. “[Farmers] need to be really careful not to exceed production costs.”
Mary Fendrick runs Rock Hill Orchard and Woodbourne Creamery with her husband in Damascus. They sell their dairy products on-site.
She said business has been good this winter, with a steady stream of customers coming to the farm.
“Our dairy is not really impacted by the farm bill one way or the other,” Fendrick said in an email. “Since we process and sell our own milk, we are able to set our own prices.”
Criss said farmers such as the Fendricks can charge slightly higher prices than a co-op by selling directly to consumers.
“The milk is basically going from their cows to a shelf where you can buy it in a few days. That has a real attractive value to customers today, customers who want to know where their food comes from,” he said.
Dickerson dairy farmer Laurie Savage and her husband run Savage Acres Farm, a dairy operation with 100 cows. She and Weitzer both sell their milk to the Maryland and Virginia Milk Producers Cooperative Association in Frederick, which processes and prepares it for distribution at local grocery stores.
But farmers such as Savage, who don’t set their own prices, are more concerned about the farm bill’s potential effects.
“We just hope new farm bill programs will allow us to pay our expenses with enough left over to pay us living wages,” Savage said in an email.
Montgomery County has five dairy farms. According to the U.S. Department of Agriculture’s census data, 100 Montgomery County farms had dairy cows in 1974, but that shrank to 49 farms in 1987.
“It’s difficult to maintain a dairy operation in an urbanizing county,” Weitzer said.