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New York dairy farmers struggle amid rising costs
New York Ag Connection - 02/23/2024

New York dairy farmers are facing a tough squeeze: rising labor costs and stagnant milk prices are putting their livelihoods at risk. Greg Porter, owner of a 2,000-cow farm in Watertown, says this year might be a breaking point for some.

Labor is a major pain point. Porter has 28 employees, and competing with other industries offering higher wages is tough. "We don't set the price of our product," he laments, referring to the USDA formula that determines milk prices based on fat and protein content.

A Cornell study shows labor costs ballooning from $730,000 per farm in 2016 to $1.1 million in 2022, and Porter believes the actual cost is even higher. Maintenance, repairs, and other expenses add up, leading to tough choices. "You have to rob Peter to pay Paul," he says, describing deferred maintenance due to labor costs.

Milk prices haven't helped, dropping nearly 20% in the last year. While some farmers might try to increase production, they face constraints from cooperatives limiting milk output.

Jason Karszes, a farm management specialist, confirms labor as the one expense that never seems to go down. He attributes it to minimum wage increases, health insurance costs, and a tight labor market. While labor efficiency has improved (workers now manage more cows per person), it's not enough to offset the rising costs.

Despite the gloom, Porter finds hope in new facilities like Fairlife, a milk processor, opening in the state. Increased demand could improve things. "Farms are critical to the economy," he says, "and it's encouraging to see that."

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