Experts discuss milk
Jared Kurtz of Kurtland Farms in Caernarvon Township applied for the Payroll Protection Program during the first round, and he’s glad he did.
A key part of the federal $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act, or CARES ACT, the program offers two-year loans of up to $10 million for small businesses such as dairy farmers. But the fund quickly ran out of money, and a pending infusion of $319 billion is expected to run out within 72 hours, a dairy expert said April 23.
“That’s huge for us — payroll is one of our biggest expenses on the farm,” said Kurtz, who with his father, Tim Kurtz, runs a 300-cow robotic dairy operation.
It’s a Land ‘O Lakes farm with two full-time employees and six part-timers.
“Without our employees, we can’t run the kind of operation we want; it’s crucial,” Jared Kurtz said.
Dairy experts convened for the third time April 23 to answer questions and provide guidance to farmers and industry professionals in a conference call hosted by the Center for Dairy Excellence.
The focus was on financial and herd implications of milk production reduction, which Jared Kurtz said does not affect his family’s farm.
“Land ‘O Lakes did something very smart, very proactive, six years ago,” Kurtz said of the allotted production margin in which each farm has an allocated base amount of milk to produce.
Over the last two weeks, 800 dairy farmers and industry professionals have participated in dairy industry conference calls to address their questions and concerns about how the coronavirus pandemic is affecting a long-suffering industry already weathering low milk prices.
The panelists were Dr. David Kohl of Virginia Tech and owner of Homestead Creamery and Stoney Brook Farm; Dr. Michael Van Amburgh with Cornell’s Pro-Dairy Team; and Dr. Betsy Schroeder, a veterinarian with the state Department of Health.
They were joined by Deputy Agriculture Secretary Greg Hostetter and Rob Barley of the Pennsylvania Milk Marketing Board.
The good news is that dairy farmers can apply for an Economic Injury Disaster Loan, or EIDL, of up to $10,000, but farmers are urged to act quickly.
A request to reopen enrollment for the Dairy Margin Coverage program for the remainder of this year, however, was rejected.
“We want to keep cows healthy,” Van Amburgh said about those farmers facing a 10% to 15% reduction in production.
Farmers need to balance issues of culling and drying out versus penalties for over-producing, Van Amburgh said. COVID-19, the disease caused by the coronavirus, has impacted consumer behavior, and recovery will not be quick, Kohl said.
“We’re experiencing demand destruction,” he said, adding that moving toward selective globalization will take the efforts of government leaders, agribusiness lenders and producers.
Farmers impacted by the production reduction have to abide by the co-op contract, and will need certain permits to sell the unwanted milk off the farm, Hostetter said.
Paul Hartman, who with his brothers manages Scattered Acres farms in seven townships in Berks and Lancaster counties, said his two processors have not asked him to reduce milk production, although he was asked to dump milk on March 31 and April 1.
Hartman has applied for the Payroll Protection Program, saying, “My main concerns are uncertainty of milk price and worker safety.”
He sent one worker home indefinitely because his wife works in health care.
The experts noted that Gov. Tom Wolf’s announced three-phase reopening of business across the state will affect farms in northcentral and northwest counties, allowing them to move into the middle phase on May 8.
Before the COVID-19 outbreak, demand for dairy products such as cheese, butter and ice cream had been increasing, while fluid milk consumption plunged. Milk prices were low, but in the face of COVID-19, demand crashed. The supply chain disruption forced milk dumping.
The long-term outlook for dairy, however, appears to be stable in the state, Dave Swartz, assistant director for animal systems programs with Penn State Extension, said in a statement.
“There’s going to be some restructuring of the industry, but the long-term outlook is strong because of Pennsylvania’s geographic position,” Swartz said.
“Most of our nation’s milk comes from herds of more than 500 cows. In Pennsylvania, our average herd size is roughly 85 cows,” he said.
The industry must figure out a way to lower the cost of production and improve, enhance and expand local and regional food networks, Swartz said.
Jared Kurtz said he has gotten more clarity in the last week.
“I feel a little more optimistic,” he said Thursday, April 23.
In other news, farmers needing face masks can contact the Center for Dairy Excellence, which is paying for materials for masks to be made by individuals and given to farmers. Contact Emily Barge with your request at 717-346-0849.