Rising costs leave dairy farmer pessimistic about future for the little guy

By Megan Roe

January 21, 2005 | To Cleve Gibbons, it's easier to deal with cows than with people.

"I can sell a cow if I don't like 'em," the dairy farmer joked while sitting at his kitchen table.

Gibbons likes cows for a reason. His only source of income depends on milk from those cows. The problem is, he believes that income won't last for more than 20 years.

"I'll be able to retire then," Gibbons said, "I would love nothing more than to have my sons keep farming, but the way things are going, I don't know if it's feasible for one of my sons to take it over.

Gibbons, whose handlebar mustache dips well below his upper lip, said for the past two years he has been paid "historically low" prices for his milk. He was getting only $11.80 per hundred weight, that is for every 100 pounds of milk. He said he has to make at least $11.50 per hundred weight to just break even on his farm.

However, this past summer, Gibbons milk sold for $22 per hundred weight. He said when milking 95 cows, he made about $30,000 a month when his milk sold or that much money. That sounds like a lot, but when you add the expenses of equipment, utilities and feed for the cows, it's not, Gibbons said.

Right now Gibbons is making $16.72 per hundred weight. He said this is still very good, but he doesn't expect it to stay that high.

"It will drop," Gibbons said. "Usually a historic high is followed by a low."

The peaks lead to valleys that are worse.Gibbons said dairy farmers don't have any say when it comes to the price of their milk. The companies that buy their milk decide that.

"Regardless of who you sell your milk to, whether it's DFA or Gossner's, they want to buy your milk as cheap as they can and turn around and make a profit," Gibbons said.

Worse still, there aren't many options for buying farm equipment in the valley, so prices for equipment are high.

"Farmers are in a unique position because when I sell I don't have any bargaining power and when I buy I have very little bargaining power," Gibbons said.

Gibbons said there's only one way that farmers could set their own prices.

"If every farmer stopped selling his milk for one week, the stores shelves would be empty in 24 hours. But everybody would have to do it and most are leveraged to the point where they can't," Gibbons said. "I don't think it's ever going to happen."

The farmers that didn't participate could then sell their milk for higher prices because the milk would be in high demand. Also, many of the farmers in business couldn't stay afloat without pay for one week Gibbons said.

Gibbons said many dairy farmers are feeling the weight of low pay. Just to stay in business, farmers are either selling their dairies or buying more cows in hopes that they will bring in more money. He said he wouldn't buy more cows and make his dairy larger because it would be too big of a headache.

"Everybody's either getting bigger of getting out," Gibbons said. "The only way this farm will ever make money is to grow houses on it."

Gibbons dairy sits on a farm, about half of a square mile in size, next to a lonely home that seems to smile with Christmas lights. The farm's manure stench saturates the tranquil night air. "Growing houses" on such good farmland is a terrible waste, Gibbons said.

Chris Galen, a spokesperson for the National Milk Producers Federation told the Salt Lake Tribune that low milk prices in recent years have caused many small dairies to cease operation. He said the U.S. has an estimated 8.5 million dairy cows, the lowest number in at least five years.

Gibbons took over his father's dairy in 1981. At first, milk prices were high and he made a lot of money. He said he bought a new tractor that cost $32,000. Now the same size and type of tractor would cost $70,000. The only problem is he's making about the same amount of money he made in 1981. He said utilities have also more than doubled in cost.

"That's what's killing us," Gibbons said. "Everything's has almost doubled in cost, but we're earning the same amount."

Gibbons said the only reason why his dairy is still in business is because he's not in debt. He said most farmers are in debt because of equipment costs and therefore can't stay afloat.

According to the Deseret Morning News, the number of dairies in Utah has dropped significantly. In 2001, there were 400 dairies in the state. A year later, the number fell to 372.

Gibbons' son Tyler said many dairy farms are failing because it is such hard work.

"It's like taking a 10 question quiz. If you miss one question, you lose 10 percent of your grade," Tyler said. "You have to work 100 percent because you can't afford to lose that 10."

Gibbons is sticking to his occupation until he no longer can.

"I like what I do," Gibbons said. "Did I make the right choice? I think so."

MS
MS