By DOUG GRAVES

Ohio Correspondent

WOOSTER, Ohio — The northern portion of Ohio is considered dairy country in this state. Dairy farms dot the landscape between Wayne County in the east to Mercer County in the west.

Because of the dramatic drop in milk prices, however, many Ohio dairy farmers are leaving the business at a higher than usual rate. In March 2018, there were 2,253 licensed dairy farms in Ohio, a decline of 59 farms in five months.

“Every year, some farmers retire and give up their dairy licenses, but there’s been an uptick recently,” said Dianne Shoemaker, Ohio State University extension field specialist in dairy production economics. “Farmers are deciding they can no longer dig any deeper into their equity to pay for what I call ‘the privilege of milking cows.’”

According to Shoemaker, profits for milk are low because the price dairy farmers are paid for their production has dipped in recent years. In 2014, dairy farmers nationwide basked in high prices. Worldwide demand was high and the number of cows producing milk was comparatively low.

Since then, prices have been steadily declining, as have the farmers’ profits. According to the Ohio Dairy Producers Assoc., milk prices in 2014 averaged $23.16 per cwt. So far this year, the average is $14.43, or a 38 percent drop. The supply of milk is outstripping the demand by far, and this is driving down the price.

“There’s just so much excess milk right now, and it looks like that’s going to continue to be the case for a while,” Shoemaker explained.

In Wayne County, the state’s top dairy county, county extension educator Rory Lewandowski is increasingly hearing about farmers selling their farms or cows. And others, he said, are seeking bank loans to continue their operations.

“Nobody is doing really well in this situation,” he pointed out. “Definitely people are depressed.”

Those in Mercer County in west-central Ohio are feeling the pinch as well.

“Some of the dairies in this county that recently closed did so because making more of a profit would have required them to expand, purchase new buildings and modernize their milking equipment. The investment was too great a risk given the low prices,” said Dennis Riethman, county extension educator.

“About a half-dozen farms in this county recently closed, and I anticipate there will be more within the next year.”

Some Ohio producers are having to seek out new markets because Dean Foods, the second-largest dairy company in the United States, has announced that starting May 31 it will cut its contracts with 100 independent conventional dairy farmers in Ohio, Indiana, Kentucky, Tennessee, Pennsylvania, New York, North Carolina and South Carolina.

“Also, milk cooperatives as well as independent milk processors have sent out letters in the past two years dropping some dairy farmers due to low demand and an oversupply of milk on the market,” Shoemaker said. “Previously, farmers typically were only dropped from cooperatives when they produced poor-quality milk.

“Dairy farmers no longer receive a bump up in pay for producing more milk in the fall, when the demand is typically highest and production is the lowest.”

And once a farmer leaves the dairy business, it’s not necessarily easy to get back in when the price of milk improves, she said.

“That’s because the farmer has spent years, even decades, developing a productive herd of cows and replacement heifers, so if they are sold off it can take just as long to get started again,” she noted. “Or, if a farmer sells off the milking herd and keeps the replacement heifers, there’s no income. And you’ve got all these mouths to feed. That’s not usually an attractive option.”

Shoemaker said dairy producers can consider other ventures to make money on the farm, but the switch typically is not an easy one. A farmer growing field crops for a living needs to plant 1,000-2,000 acres to earn enough to rely solely on that income, and with low prices for corn and soybeans, that’s especially tough.

“While organic milk and other products have gained in popularity in recent years and typically offer higher profits than traditional milk, the organic milk cooperatives that take on the independent milk suppliers have no openings right now,” she said.

“Like the price of anything, what goes down must come back up at some point. Demand for milk will increase or supply will decrease, or a combination of the two. But, we’ve been waiting three years for that to happen.”