Dairy producers are enduring one of the most serious and protracted economic crises of any segment of agriculture. The recent temporary extension of the 2008 farm bill by Congress addresses neither the cyclical stresses that affect dairy producers, nor the greater ongoing fundamental shift in the dairy industry.
The temporary extension put off meaningful solutions. What should be done to improve the bottom line for dairy producers is a matter for debate. I will leave that part of the problem to farm economists, dairy producers and legislators.
For a penetrating analysis of the dairy situation, see Kirk Kardashian’s recently published book, Milk Money: Cash Cows and the Death of the American Dairy Farm. Kardashian is affiliated with the Tuck School of Business at Dartmouth College. He examined the dairy industry from its inception as an agricultural enterprise to its current state. I will focus on ways dairy people, and any farmer, can cope better with behavioral health issues that accompany severe financial pressures.
Hunkering down is a way many farmers deal with economic challenges. Livestock and dairy producers often sell off a portion of their herd, usually the poorest-producing animals. Some farmers also delay improvements to their operations and reduce purchases of inputs.
The aim is to retain enough animals, whether swine, bovines or whatever animals the farmer raises, to have a solid genetic base from which to expand when prices for the finished products improve.
In an Oct. 9, 2012, article for Bloomberg, Elizabeth Campbell reported 2.04 million dairy cows were slaughtered during the first eight months of 2012, in response to below-break-even milk prices and increasing feed costs.
This was 6.7 percent more than in all of 2011, and the most cows culled since 1986.
Reducing increasingly expensive inputs such as protein and grain has cut milk production somewhat, along with drought negatively affecting the quality of pastures and hay production.
Reducing the number of dairy cows and their feed has not resolved the milk price problem, however, because production per cow has increased slightly. Economic forecasters predict further cow sell-offs and bankruptcies among producers before milk production declines enough to boost prices sufficiently. Both large-scale and family-sized operations are being affected.
It is psychologically better for farmers to sell off some of the herd than to fully liquidate the herd or resort to filing bankruptcy. In most cases partial liquidation gives producers hope for the future as well as enough capital to “hang on” longer.
Partial liquidation also helps producers feel they are contributing to necessary changes within the industry – that is, reducing the overall supply in comparison to the demand for their products. Producers feel they are sharing in the solution.
Total bankruptcy can be a killer. The farm crisis of the 1980s taught us bankruptcy was associated with increases in anxiety and depression within farm families, family relationship strains such as bickering and blaming, substance abuse and suicide.
Suicide has increased recently among dairy operators who have been forced into foreclosure. It goes without saying that proactive partial liquidation, along with temporarily reducing inputs and improvements, are healthier coping strategies.
Farmers tend to work harder and suffer silently when stressed financially. Some family members acquire second or even third jobs to enhance household income.
Kardashian described in Milk Money how some dairy producers sought economic relief and failed by applying these approaches to dealing with stress. Working harder usually causes people to experience loss of necessary sleep and recreation, faster burnout and more frustration.
Foremost, we need to take care of ourselves physically and behaviorally.
It is preferable to bring outside inputs into the solution planning. Seeking consultations with farm financial managers, psychological counselors and trustworthy advisors is usually helpful.
Some of the best advice-givers are other farmers, but one must select all advisors wisely to make sure they have your best interest at heart and can maintain confidentiality. They also must “know something” – that is, they must have knowledge that is useful for your situation.
We need to share our troubles to obtain feedback, to gain perspective and sometimes just to hear ourselves verbalize what bothers us. Hope usually is easier to maintain, or reestablish, when we talk with sage confidants.
Consumers are increasingly turning to organic dairy products. Conversion of conventional dairy operations into organic production units could be a long-term contributor (usually it takes three years or longer) to solutions for the dairy industry.
Improvements in the overall U.S. economy will probably lead to continued greater demand for dairy products, even if they cost more.
Passage of a farm bill that constructively addresses the problems within the dairy industry could help, but I wouldn’t count on Congress fixing the problem. It is better for stressed dairy producers and other farmers to adopt healthy behavioral coping strategies for the immediate future.
Michael R. Rosmann, Ph.D. serves on the adjunct faculty of the University of Iowa, lectures across the United States and abroad and owns a row crop farm in Harlan, Iowa. He is also a founding partner of the nonprofit network AgriWellness, Inc.
Send your thoughts and questions to him by email at email@example.com – previously published columns are available for a small fee 30 days after they were originally printed, at www.agbehavioralhealth.com