We found that it cost farmers $2.43 to produce a gallon of milk, while the price paid to farmers was stalled at $1.71 per gallon. CISA recently worked with Dan Lass of the UMass Department of Resource Economics on a study to determine the actual costs of production for dairy farms in the state of Massachusetts. In recent years, wholesale prices for dairy have stagnated, creating a serious gap between the cost of milk production and the amount farmers are getting paid for their milk. The price farmers receive for their milk is only tenuously connected to the price you pay for milk at the grocery store. The wholesale price for raw milk is set at the federal level using a deeply complex system, based on how demand for a range of dairy commodities interacts with international supply, and decided by bidding at the Chicago Mercantile Exchange and some federal price support programs. The problem for dairy farms is in the pricing. These dairy farms have an enormous impact on land preservation, the agricultural economy, and everything else that a healthy agricultural system means for our community.
The hardy few farms that have navigated the regulatory and financial challenges to processing milk on-farm represent just a sliver of the dairy industry in Massachusetts.įor a host of historical and practical reasons, most of the dairy farms in the state sell their milk wholesale. When you hear “Be a Local Hero, Buy Locally Grown,” it’s easy to understand how you can do that: Just swing by a farmers’ market or look for local labels at the grocery store.īut when it comes to dairy, things start to get complicated. One of the things that makes CISA’s “buy local” effort so successful in the Pioneer Valley is the relatively straightforward message.
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