Baum Farm
Certified Organic
Canaan, Vermont

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Industrial Dairy Crisis
LU: 1/22/17
What is the Dairy Crisis?

Basically the dairy farms are disappearing from the United States such that some day there will be a shortage of milk.  The farms are disappearing due to the low cost paid to the farmer.  The low milk cost is due to the governemnt price fixing called the Federal milk order.  If imported milk products were limited we would not have enought milk today.  

What is causing this low farm prices?

Today essentially all milk is taken to a milk processor for pasteurization then to the retailer.  This system has created  a monopoly system with the price of milk set by the Federal order. The Federal order price over the years  has continued to reduce the price the farmer received for his milk.   Over the past 37 years the price paid to the farmer has decreased continuously in real spending power. The  Class III milk price now is 16.76 (1/22/17).  In the 1980's the milk price was about 15. How would any person like to get the same wage they got 37 years ago.  
The government has succeeded in keeping the price of milk low for the consumer but has done so by taking advantage of the farmer.  The milk price in the store would have to go up for the farmer to make a profitable wage.  The government has kept the price of milk low at a unsustainable price for too long.  

What should the price of milk be to the farmer

If you take the price of milk in 1972 ( $6/100 lbs) and scale it by 10 times it would be $60/100lbs.  The 10 times price factor is based on gold and other commodities price change since 1972.  In 1972 the dollars was un-linked to the price of gold and since that time the value of the dollars has decreased substantially.   If the farmer could get this price you would see the family farm return. Today the milk prise for conventional is about $16.5 and $36  for Organic milk per 100 lbs.   

Why the low prices to the farmer

The Federal order pricing system has successed in reducing the family farm dramatically.  The disappearance of the family farm is not because the farmer failed, or he/she was not a good farmer  it is because the Federal order system put them out of business. The government and dairy processor want and low price for milk. For the government low milk prices keep the population happy and for the dairy processors it provide a low cost to assure the sales and provides low cost for milk product export. 

How can the farmer milk price be fixed:

  1. REPEAL the Federal Order for milk prices, go to a free market milk pricing

  2. Enact anti-trust legislation to break up the monopoly of the dairy processors and the Coop industry. Every state with dairy farmers must have multiple Co-op or processors for representation.

  3. Allow the Co-op's to compete for the milk sales against one another and to work to provide a fair price for their farmers milk.

  4. Enforce anti- price fixing between Coop and processors.