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Business and Economy

Squeezed by low prices and a worker shortage, 60-year-old Maine farm shuts down

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Linda Coan O'Kresik
/
BDN
Dale Cole, owner of Cole Dairy Farm, stands in his empty barn on Wednesday. Cole shut down operations recently after years of low prices and industry consolidation and now the labor shortage.

SIDNEY, Maine — Idle farm equipment sits next to the empty barn at Cole Dairy Farm in this small town outside of Augusta, the most recent casualty in an industry fraught with dairy consolidations, high production costs, downward product price pressure and labor shortages.

All that’s left on the farm, which used to produce 2.4 million pounds, or about 278,400 gallons, of milk a year from its 100 cows, is the faint smell of manure and some very young heifers that will be sold after the remaining food runs out.

It’s a story playing out across the state, where dairy farms are a key link in the chain of producing enough food locally to feed Mainers. Some 109 Maine dairy farms shut down over the past nine years, according to Maine Milk Commission data. With fewer outlets buying milk, the price pressure on dairy farmers likely will continue. If more fail, Mainers ultimately could have fewer local choices in the dairy aisle.

Only 187 dairy farms remain in operation in Maine today compared with their heyday in 1954, when there were almost 4,600 farms. For years production costs have been higher than revenues, according to Maine Farmland Trust, making it hard for farms to survive.

For Cole Dairy Farm owner Dale Cole, 63, the final straw was not being able to hire farmhands at a livable wage. Last week he sold his cows to another dairy and closed the farm, which had three part-time and three full-time workers.

“The labor pressure has been building for some time,” said Cole, a second-generation farm owner. “If your labor costs are going way up and you get a reduction in pay for the milk, I don’t have to explain to you what’s coming down the road. It just can’t be done.”

David Doak, who shut down Doak Farms in Monroe three years ago, agreed. Low prices for milk and high costs of trucking figured into his decision to sell his 45 cows. He also represents another trend in the state of older farmers retiring and having no one to take over the farm. The average age of a US dairy farmer is 56 and fewer young farmers are coming into the industry, according to national data.

Dairy farming is a big contributor to Maine’s economy, with an estimated $2.7 billion in direct and indirect economic impact, according to the International Dairy Foods Association. It makes up 4.2 percent of Maine’s GDP, provides almost 17,000 direct and indirect jobs and contributes almost $147 million in state tax revenues, the association said. Consumers can tell if their milk is produced and processed in Maine by looking for the number 23 starting the code on the milk container.

The consolidation in the dairy industry has left fewer places for dairy farmers to sell milk, which means less competition to keep prices stable. One example of consolidation is the former Grant’s Dairy in Bangor, which Garelick Farms bought in 1994. Garelick ceased milk production there in January 2013, citing competitive pressures. In the Portland area, Oakhurst Dairy ended its 92 years of being family run in 2014, when it was sold to Dairy Farmers of America.

Having to rely more heavily on fewer customers, a byproduct of the industry consolidation, poses additional challenges to farmers. That came to light in August when 89 organic dairy farms in the Northeast, including 14 in Maine, were notified they would lose their contracts with organic dairy company Danone when it stops buying milk in the region by the end of August 2022.

Gov. Janet Mills, along with all four members of Maine’s Congressional delegation, wrote letters to the U.S. Secretary of Agriculture asking for federal help. Mills also asked Danone to revisit its decision to end the contracts or at least extend the termination date from 12 months to 18 months.

In a market with fewer customers that can push prices low, it is difficult to invest in farm upkeep and improvements. Cole fell short of money to build a new barn for his heifers and update some equipment. Money got even tighter when buyers put a quota on how much milk they would purchase, such as when they didn’t have enough labor for a production shift.

“It’s difficult if I need to make a large investment but then have to cut back 15 percent of my milk because of the quota,” Cole said. “When a bigger and bigger piece of your output goes to one place, you lose control of your business.”

Cole said the saddest thing about closing down is there will be no third generation to continue running the farm. Instead, he plans to sell hay with help from his son.

But the broader picture, he said, is that local farms need to continue, because Maine needs its own food supply. The effect of supply-chain disruptions was laid bare early in the pandemic when supermarket shelves with milk and beef were often empty. Retail experts expect ongoing shortages on a broad array of goods through this holiday season.

“The thing that’s been driven into us a bit more in the last 18 months with COVID-19 is the state of Maine always needs to have a viable source of food,” said Heath Miller, treasurer of the Maine Dairy Industry Association and owner of the Green Valle Farms in Newburgh, where he milks 200 cows. “When you lose any aspect of the agricultural culture, you lose such a big part of the infrastructure.”

A large part of the community also is lost, Sarah Littlefield, executive director of the Maine Dairy Promotion Board, said.

“To see a farm go out of business is very emotional, because their way of life is going to significantly change and their community is going to change because that farm isn’t there,” Littlefield said.

This story appears through a partnership with the Bangor Daily News.