Old-school dairy farmers look for an out

Hilltop Farm on the market, but who can afford to get into the dairy business?
By Ethan Andrews | Dec 08, 2016
Photo by: Ethan Andrews Dairy farmers Eileen and Jack Hill are looking to sell their multi-generational homestead and business, Hilltop Farm Dairy in Monroe, which they say has been slowly sunk by regulations and competition.

Monroe — Jack Hill recalled being notified that his cows could no longer drink from a stream running through the center of his farm. The stream had been a selling point when he bought the land in 1966 and started Hilltop Farm Dairy. Now he would have to install a watering system. It was as if someone had told him his cows had to wear sneakers.

Hill and his wife Eileen sit at their dining room table to speak with The Republican Journal. Outside, Route 139 splits the farm and marks the boundary of Monroe and Winterport. The Hills' property continues on the other side of the road, downhill to the stream and up again on the other side, to a rise where Jack Hills' brother's house is visible on the next ridge.

The couple once had 50 Jersey cows, but sold off all but 15 recently after being notified they were being dropped from the milk collection route. The problem was another regulation. Somatic cell counts from the farm were higher than allowed under European Union standards adopted in 2012.

Older cows typically yield milk with higher somatic cell counts, which are linked to increased risk for containing harmful bacteria, and that was what the Hills had. In an effort to stay ahead of costs, they sold most of the herd. Hilltop was later invited back, but the cows were gone. Those that remained would have the same problem meeting the somatic cell count limits.

M.A. Haskell, a milk hauler, has been collecting milk from Hilltop Farm for at least 30 years, according to part owner and longtime driver Jesse Haskell. The decision to drop the farm from the collection route came from the other end of the supply chain.

He described Hill as "a good farmer."

Haskell's own farm switched over to organic milk, which fetches a higher price than conventional milk, and he said an increasing proportion of farmers are going that way.

Today, the Hills milk their 15 cows twice a day in a side-opening "parlor" split down the center by a recessed walkway that allows them to reach the udders without crouching down. The milk travels from the udder through a short network of stainless steel pipes into a shining stainless steel tank. The Hills bottle some of their own raw milk, which they sell directly to several small grocery stores in the area, but the majority is collected by M.A. Haskell and sent to markets for conventional — not organic — milk.

When Jack Hill bought the farm in 1966, there were 1,200 dairy farms in Maine and eight or 10 processors. Now there are about 250 farms and two processors. Hills reckoned 95 percent of milk in the Northeast was controlled by one company — "Now that's pretty close to a monopoly," he said — and while not technically true, there's no question that the big players in the dairy business are bigger today, and there are fewer of them. Dean Foods and Dairy Farms of America are the big players in distribution and collectively own most of the labels for sale at local grocery stores.

Hill lifted one hand from the dining room table and made a gesture of crushing something under his thumb. He made the same gesture again later while describing the increasing number of regulations placed on dairy farmers, relating to food safety, animal rights, and environmental protections.

Regulations on liquid milk production have roots in legitimate public health concerns. Before pasteurization — a process in which milk is heated slightly to kill harmful bacteria — human infections of bovine tuberculosis were common and posed a significant health risk. While the disease is less common now, there is still a risk with raw milk.

Asked about the balance between helpful regulations and onerous ones, Hill reckoned there weren't any good ones. Later he made it clear that he takes no chances with tuberculosis. Beyond the obvious health risk to consumers, farmers have a strong financial incentive to be vigilant. If contamination passes unnoticed, a small dairy farmer could end up on the hook for a tanker's worth of spoiled milk — or if the infection isn't detected right away, an entire silo's worth.

The Hills test their milk for antibiotics. Eileen demonstrated the process in a small incubator under a window in the dining room. Samples are put in short test tubes with a purple substance in the bottom and heated. If the purple changes to yellow, the milk is OK. It is straightforward, but it also adds a step, and another cost, to a process with negligible profit margins.

Like most industries over the past century, dairy production has shifted from many small farms to a fewer large ones. Federal price controls guarantee farmers a minimum price and Maine's Dairy Stabilization Act further stabilizes the prices farmers get for their milk.

While these price controls factor in the economies of scale at larger farms, smaller farms still face two hurdles to getting their milk to market. With fewer cows, they have less to offer to haulers, who Hill said would rather fill up at one large farm than stop at many small ones. As smaller farms go out of business, the ones that remain are left farther apart, which makes them even less lucrative stops.

The Maine Milk Pool — a fund from a surcharge on sales of milk that is farmed, processed and bottled in Maine — has dried up as processors like Dean Foods subsidiary Garelick Farms, which closed its Bangor processing plant in 2013 and took up the slack at plants in Massachusetts and New York, have moved out of state.

Jenni Tilton-Flood, of Flood Brothers Farm in Clinton, likened the chance nature of the business to various natural disasters: tsunamis, tornadoes. The business is ruthless, but there is an element of luck, too.

"We've seen it on the news," she said. "You have this entire town wiped from the map and you have this one house standing there untouched."

Flood Brothers Farm is the largest dairy farm in Maine with 1,650 milk cows and 50 employees on its payroll, including members of the six families who own the business. The farm is an owner and member of Agri-mark, a cooperative of roughly 1,100 farms in New England and New York.

Flood Brothers sends its raw milk to HP Hood's processing plant in Portland where it is pasteurized and bottled.

Despite being the big fish in Maine's dairy farm community, Tilton-Flood said the business is at the mercy of many of the same outside forces as smaller operations like Hilltop Farm.

"We're sitting in the dooryard with the same concerns and some other ones too," she said. "There isn't a bad guy."

But Flood Brothers has taken a different approach to the changing dairy industry than Jack and Eileen Hill.

In contrast to Hill's devil-may-care complaints about new regulations pushing the time-honored farming traditions beyond the pale of common sense, Tilton-Flood spoke in sentences honed by public relations efforts and testimony before various legislative bodies. Some of the rules might be too much, she said, but many were necessary, if only for appearances.

"Sustainability" is a founding principle of farming, she said. But consumers, who are newer to the idea, need the sustainability of their goods to be quantified somehow. If they don't see what they are looking for, they might look elsewhere. And the bar is necessarily higher for food.

"This is not a public service we're providing," she said. "We're dependent on consumers to trust us."

Tilton-Flood acknowledged the consolidation at the upper levels of the business, but doesn't see the dairy industry as being under the thumb of a monopoly. To keep that from happening, she said, farmers need to pay attention to existing laws and new ones that might affect them, or pay for it later.

The 2011 Food Security Modernization Act, for example, initially would have made spent grains from breweries — often a component of dairy farm feed — subject to more stringent regulations for commercial animal feed. The added cost would have hurt the agriculture economy, but farmers, advocacy groups, brewers and legislators noticed it early, Tilton-Flood said, and their comments prompted the Food and Drug Administration to revise the bill.

Asked if there were one thing she could change to make things easier for farmers, she said the pricing system probably could be revised. "But then I have to wonder about all the concern of how the market has gotten smaller and fewer players," she said. "Would that translate into a good thing?"

If there were a magical way for farmers to be a paid commensurate with the amount of money and effort it took to produce the milk, that would be the thing, she said.

"How to get there, I don't know," she said.

Many dairy farmers describe the work as a calling, the merciless hours and scant profits justified by a love of it all. Hill, likewise, is not eager to scale back, but he believes he's been pushed out of the game, at least for conventional milk.

The Hills are hoping to sell their large farm and move to a smaller piece of land where they can continue selling raw milk on a small scale.

Raw milk avoids some of the regulatory hurdles of conventional dairy farming. And while Hill isn't starry-eyed about local food, selling milk more or less directly to people in neighboring towns more closely resembles the traditional ways of doing things, when cows could drink from streams and so forth.

Hill tried to get Maine Farmland Trust interested in the farm but said the nonprofit didn't offer much money the first time around and he bowed out after later negotiations left him with the impression that he was being strong-armed.

He got an independent appraisal of more than $500,000 for the farm, but he was doubtful that anyone could pay that much and hope to make their money back though dairy farming.

When he spoke in early December, there was a hand-painted sign next to the road advertising the farm for sale. He was hoping the Amish, who have established large farms in Thorndike and Unity, might take an interest.

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