Since the mid 1800’s dairy farming has been Vermont’s major
agricultural enterprise. It is today.
Dairy farming has never been easy due to the many changes on the farm,
in the markets, and in the public policy arena over the years.
At one time, after the demise of the position as the leading
merino sheep state, Vermont became the butter capital of the world, winning prizes
in international competitions. Starting in 1854, an iced butter train left St.
Albans for Boston once per week and the region was known as one of the
greatest butter producing centers in the world. Vermont butter was considered the acme of
perfection in New England markets. By
1899, Vermont was producing 35 million pounds of butter. Whole support
industries like the Bellows Falls Machinery Company (maker of butter churns and
equipment), and the Montgomery butter box firm, existed to support this trade. Eventually
the butter trade, as well as the businesses that supported it, largely
disappeared. This was due to competition from the West (cheaper to bring butter
into New York from Chicago than from Vermont, it is recorded). From 1890 on, competition with western butter
became increasingly acute. Other events
that led to its decline included the introduction of margarine (see the stories
about the butter and margarine wars), and the increasing demand for fluid milk
from cities like Boston.
Becoming a fluid milk producing state had its challenges too.
These included fair pricing from buyers, shipping rates and fees, sanitary regulations
with interstate shipments, management on the farm, and better animal genetics. Due to the concerns, relative to fair
pricing, numerous studies were conducted.
For example, in 1915 the Boston Chamber of Commerce did a thorough
analysis of the marketing constraints faced by Vermont dairy farmers, and recommended
that farmer cooperatives be formed to guarantee better pricing for
farmers. Federal legislation to include
Capper-Volstead Act in 1922 gave these farmer cooperatives limited anti-trust
protection against price fixing.
In 1927, thirty percent of Vermont’s population was engaged
in farming, and there were twenty-seven thousand farms in the state. By this time, Vermont was a major supplier of
fluid milk to the Boston Market. The
depression, however, brought a period of great economic turmoil to agriculture
in Vermont as well as nationally. With the passage of the federal Agricultural
Adjustment Act of 1937, marketing orders were established and dairy farmers in
Vermont, New England, and elsewhere voted for federal control of pricing
through these orders. After World War
II, a parity system was instituted to provide better pricing to dairy farmers
that equated to the period 1910-1914.
This was considered one of the better times in the farm economy. The pricing system was advocated and
supported by dairy cooperatives throughout the United States.
Since 1982, and the elimination of the parity concept, dairy
pricing in the United States has moved toward more market orientation and
greater pricing unpredictability. While
there have been several attempts since 1982 to better control or influence
pricing ( a national whole herd buyout, and followed by the Northeast Dairy
Compact), today greater pricing unpredicapitcaly and volatility exists for the
convential dairy farmers in Vermont and elsewhere. Vermont and other Northeast conventional
dairy farmers are faced with an unstable and unpredictable demand for dairy
products in international markets; a declining demand for fluid milk in
regional markets and its depressing impact on the Marketing Order pricing; a
Westward migration of U.S. milk production; and finally, increased costs
associated with water quality environmental compliance.
The early leaders of Vermont agriculture stated in the
1894-95 Report of the State Board of Agriculture that “our own state has seen
one industry after another go down under the fierce competition of cheap
western land. Our sheep, beef, and grain
production have all been borne down through this course, and today our dairymen
are contesting the ground with these same forces.” Yes, time and technologies do change, but as
others recently have concluded, while our advantage in Vermont and the
Northeast is being near large markets, it is an advantage that will continue to
erode without an aggressive strategy. U.S milk production will continue its shift
to large dairies in the West. It is
known that dairy product manufacturers look to where production is growing and
not declining in siting facilities.
While there continues to be debate over the direction of
Vermont’s valued conventional dairy sector, I believe it is understood by many
that the strength of Vermont agriculture is the entrepreneurial ability of
farmers to solve problems. However, the magnitude
of the problems faced today requires that there be informed dialogue among and
between farmers, and their cooperatives, consumers, processors, environmentalists,
policy officials and others to consider and debate feasible options for the longer-term
sustainability of the dairy sector in Vermont.
It is too important an industry to do otherwise as the market will
likely continue to erode Vermont’s position as a valued milk producing state if
action is not taken soon.
Roger Allbee is a former Secretary of Agriculture, Food and
Markets for Vermont. He has been Executive Director of the USDA Farm Service
Agency for Vermont; he has served on the U.S. House Committee of Agriculture;
he has been Chair of the Animal and Animal Products Advisory Committee to the
U.S. Trade Ambassador and the U.S. Secretary of Agriculture; he has
participated in the Seattle Around of Multinational Trade Negotiations; and he
has been on the Senor Management Staff of the Former Farm Credit Banks and Bank
for Cooperatives for the Northeast. He
does a blog on Vermont’s agricultural history at
www.whatceresmightsay.blogspot.com
