Milk Money

Modern Farmer, aka my favorite internet destination for go-live-on-a-farm fantasy fodder, has gone “inside the milk machine” and reports on the modern state of dairy farming, both organic and industrial. It includes some quick “how we got to where we are now” history that helped both solidify my understanding of current affairs and affirm my decision to spend too much money on milk at the farmer’s market:

And so in the mid-20th century dairy farming underwent a major change. The federal government fixed a minimum price for Grade A liquid milk, milk for drinking. The price dropped. Farmers had to produce more. To produce more, cows needed to eat more protein, which meant farmers bought high-protein grains, such as soy and grasses like alfalfa. Many dairy farmers were also grain farmers, but soon it became difficult to produce enough to sustain their cows, and they became grain purchasers. Unfortunately, the prices for grain and fuel went even higher, while milk was fixed at a low price. This made it harder, bordering on impossible, to make a profit on milk.

They also talk to a number of dairy farmers who are in that in-between place, debating between scaling their businesses up or down, going more industrial or organic. Patrick Holden, for instance, found that raising grazing cows, and fewer of them, that he didn’t have to buy grain to feed was actually more profitable for him:

“To make more money,” he explains, “you increase revenue or reduce expenses.” He radically reduced his operating costs by becoming an organic farmer. He no longer buys grain and is training horses to replace tractors, which will reduce equipment and fuel expenses. He now has less than half as many cows and his cows produce less than half as much milk. But organic milk is priced on the assumption that people will pay more for it — he sells his milk to Horizon, the largest-selling organic milk brand in America, for roughly $33 a hundredweight. “I’m not getting rich, but we can pay our bills now,” he says.

Will consumers pay for organic milk? The answer seems to be yes. In 1999, sales hit roughly $75 million in the U.S. Now, organic milk and cream bring in some $2.5 billion per year.

But milk lovers might be surprised by exactly what “organic” dairy entails. Horizon — one of just a handful of companies that dominate the organic milk market — buys its milk from over 600 organic farms around the country, including Upson’s Belted Rose Farm. Horizon milk, originating at large and small farms, is mixed in tanks and packaged as Horizon.

Having your cows’ milk thrown in a big vat and mixed around with other milk makes sense, but is so weird! How many cows am I drinking from right now?! Too many!

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