Season 2, Episode 6: Commodity Milk and Some Small Farm Realities
LISTEN TO THE EPISODE:
On Today’s Episode:
Can we touch on, like, why farming is so unprofitable?
In this episode of Was Is Could Be: The world of commodity milk.
With Special Guests:
Chris and Sarah Ficken are the farmers behind New Moon Farm. Whether it is milking the cows, cutting hay, weeding the garden, or balancing the checkbook, you will find one of them behind each and every task. The day after their wedding, they put an offer in on the farm, and a few months later it was theirs. Since December of 2012, they’ve been working hard to rehabilitate the land and the buildings. Whether it is jacking up the old barn by hand, building their milking facility from bare ground, pounding posts and running fence for their cows, or reclaiming old fields with a chainsaw and some good friends, they strive to mold their farm to fit their dream of environmental, social, and financial sustainability. Check out NY Farm Basket to buy some amazing goods from Chris and Sarah!
The Was Is Could Be podcast is produced by Liz Russell at To Eat and To Love, LLC. Each episode is carefully edited by Joshua Rivers of Podcast Guy Media, LLC. Our theme music is made by Neil Cross and published by ImageCollect Publishing.
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Liz Russell:
Okay, we are recording. First question. You know, what I really wanna get to here is really set the tone for your story. So I'm looking to tell everybody who you are, you know, your backgrounds and the name of your farm, what your farm situation is.
Chris Ficken (Dairy Farmer):
I'm Chris Ficken. I grew up in Wisconsin. I've been living in New York since 2004. And on this farm since 2012, not really from a farming background, but I sort of am. My father was a computer programmer and my mother was a chemical engineer. And we started out with a 4-H project. I'm the youngest of four, and we could each take three cows to the county fair. So we all just signed up for three cows and all of a sudden we had 12 cows and that's a little bit more than we needed for the family milk. So in 1999, we started shipping milk commercially, my family did. And in 2004, we moved the farm out here to New York and in 2011, Sarah and I started our own farm on a small rented place in Dryden, New York. And then in 2012, we bought this farm. No, actually we started the farm in 2012. Yeah, I got that wrong. So we started our farm in 2012 and a small rented farm in Dryden. And at the end of 2012, we moved up here and bought this farm. And we've been here ever since.
Sarah Ficken (Dairy Farmer):
So I'm Sarah Ficken. My background is not originally in agriculture at all. I grew up on Long Island and went to Cornell for forestry and natural resources. And with the idea that I would go work for the U.S. Forest Service and, you know, have adventures like jumping out of airplanes and fighting fires. I graduated from Cornell a semester early, was really focused on just getting done and starting life, and exactly a month before graduation, I met Chris with no thought of being in a relationship with anybody. And then the day after graduation, we started to date and right around the time that we were getting out of school and I was working for the fire service over in Hector and the federal government was going through a lot of like hiring freezes and furloughs and just all sorts of craziness.
And so we decided that it was a better choice for us to start a farm and to sort of work towards a goal of, you know, having our own business as opposed to following my career and for the federal government. And so, yeah, we ended up buying the farm in 2012, about eight months after we bought our first cows together. And here we are, and I guess sort of the way we found our farm. So we were renting a farm in Dryden, like Chris mentioned, for a couple months, we had taken it and really sort of rehabbed it, bought some cows for milking in the barn. There wasn't much land associated with the farm, just enough to graze the cows a little bit. So we were really having to purchase feed, pick up weird little, you know, two acres here, two acres there.
We mowed and baled one of my professor’s front lawns. And that was where we got the majority of our feed for the first couple months. And so while we had this really strong network around Ithaca, we knew that that wasn't a forever home, I guess. Yeah. And so we started looking for farms a little bit before we got married and we were actually not looking at this farm. We were looking at a farm just up the road. And Chris had had his eye on a farm that was in Stockbridge. We didn't know where in Stockbridge, we just knew it was in Stockbridge. And so as we were driving home, after looking at this other farm, this was in the days before GPS, came to this crazy four way intersection and Chris was like, oh, Stockbridge Falls Road. I bet you, that might take us to Stockbridge where this other farm we were interested in was, and as we're driving a little bit down Stockbridge Falls Road, all of a sudden Chris stops the car and is like that farm's for sale.
There's no for sale sign. There's nothing that indicates this farm is for sale. But as he'd been like scrolling through farm websites, he'd happened to see this farm and remembered what it looked like, and it looked familiar. And so we stopped, we looked, we liked what we saw. And instead of spending the week before getting married, doing like normal things, like freaking out over the fact that my wedding dress wasn't done or, you know, ordering flowers, instead we spent the week before our wedding looking at the farm with my mom, making sure that things were as they seemed. And then the day after our wedding, instead of, you know, going on a honeymoon, we went to the DMV and Social Security Administration. We legally changed my name. And then we went to Farm Credit and we put an offer in on the farm.
Our farm is New Moon Farms and we're located in Munnsville, New York. On our farm, we are predominantly a dairy farm. So we're part of the Agri-Mark Cooperative. So if you buy CA cheese, that is one of the brands that Agri-Mark owns. And so as a co-op member, we're part of that, but we've always believed that diversifying is key to being a successful small farm. In addition to raising dairy cows and milking dairy cows, we also sell some of our own beef and I run a farm business called New York Farm Basket, which allows any consumer in the Northeast, Midwest, Mid-Atlantic to go online and order farm raised food delivered directly to their door.
[🎶Theme music🎶]
Liz Russell Narration:
You might remember Chris and Sarah from episode two. We had found each other online and we've been following each other ever since I contacted Chris and Sarah, when I wanted to understand something that seemed like it should be pretty straightforward. And that's how someone buys and sells milk. There's a story here. Of course it's short and it's sweet. And it goes a little, something like this. I wanted to do the local dairy thing just to add to our local food. I wasn't looking for raw milk or anything. Just something that came from local cows, preferably happy and healthy ones. And I just wanted to do that so we could kind of close up this final local food gap. We don't have a lot of dairy needs per se. We usually only use milk to make yogurt and butter. That's just our preference. But when I went to farmer's markets, there were very few dairy farmers there.
The more I looked into it, the more I noticed that there were cooperatives and processors throughout central New York. And even the milk I bought had plastic gallons marked with processing plant numbers. It seemed to be direct here that even this local food version of dairy was still kind of commercialized when COVID hit. The news was showing free milk giveaways and talking about dumping products. If this dairy system was in fact a system, why was it being so hard hit? I wanted to understand the milk market from the inside. So I talked to Chris and Sarah, but be prepared. This gets kind of detailed. So stick with me.
Liz Russell:
I don't believe that a lot of consumers understand commodity milk at all. And I don't think they understand how might prices work. And so I thought that was just a really fascinating angle to make sure people understood.
Chris Ficken (Dairy Farmer):
To be perfectly fair, there are an awful lot of farmers who also don't understand how milk is priced.
Sarah Ficken (Dairy Farmer):
So, and Chris, you're gonna have to help me out a lot, but basically when we sell milk, we're not just selling milk. Our milk is broken down, basically, when it is priced into its components. So how much fat is in the milk, how much protein is in the milk and a few other things. And then based upon these milk characteristics, we're then given a price. We have an overproduction problem in the United States. So a lot of our milk is exported. Something like 13 or 17% of the milk is exported to other places. So China has been a really big importer of U.S. milk. Honestly, a lot of Southeast Asia, Europe has imported some milk; Russia has imported milk. Mexico is one of our biggest importers as well. And so the last couple years have been a little bit dicey because as trade deals were renegotiated or just stepped away from there wasn't any place for our milk to go.
And so when you have too much of something, the price drops and there really isn't the domestic demand for all of the milk that we can produce. And so maintaining really good trade relations is really important. And so we were seeing a lot of price fluctuation just over the last, well, there's always price fluctuation in dairy, but the last three years were pretty tough. And then beginning of 2020, it looked like milk prices were starting to rebound. We were in a pretty comfortable position because our cows make really high component milk. So there's a lot of butter, fat, and a lot of protein. We get paid a little bit better than average, but a lot of our food system, just like our toilet paper system, as we discovered in March, is geared towards providing product to like restaurants and wholesalers. So universities, prisons, restaurants, those kinds of places.
And so both consumers really, yeah, both consumers. And so when, when March happened and everything shut down and restaurants shut down, that was a huge shock to the system. And all of a sudden there were tanker loads and tanker loads and tanker loads of milk that had no place to go. And so cooperatives and direct shippers were just dumping milk. The milk was leaving the farm going around the back, going right into the pit because there was nothing to do with it. There weren't the systems in place basically to get the milk to the people who might have consumed it at a restaurant. There wasn't the bottling capacity to put it in a bottle and put it on the supermarket shelf. So milk price dropped really, really quickly and cooperatives and other milk processors were in a really tight spot ‘cause they had all this product and nowhere to move it.
Liz Russell:
So when you're getting your first price for those components, is it the cooperative who's giving that price to you?
Chris Ficken (Dairy Farmer):
Sort of, but not really. So we're part of the Northeast federal milk marketing order. So the way that that works, it tries to equalize how milk is paid and where the money goes. So what it means is that people who sell their milk for let's say yogurt. So yogurt is a class. Powdered milk is a class, cheese is a class and fluid milk is a class basically. That's sort of an oversimplification, but that's close enough. And so for example, right now in February of 2021, theoretically fluid milk producers are gonna get paid $18.61 per hundred pounds. And the yogurt producers will get paid $14.20, cheese producers will get $15.32, and powdered milk with $13.53. Now that sort of isn't fair to the farmers because the milk is not worth more just because it's going to fluid, it's just historically paid higher.
So the way that it works is we all go into a pool, all of the milk goes into a pool and then basically the price is averaged out. So the blended price for everybody in the pool is $15.64 a hundred weight. So that's a hundred pounds of milk at a standardized level of components, which $15.32 for a hundred pounds of milk is not a whole lot there. A lot of farms need at least another dollar a hundred weight, if not two or three, in order to meet their obligations,
Liz Russell:
When prices dropped in COVID, it's not your cooperative saying like, Hey, we gotta drop this?
Sarah Ficken (Dairy Farmer):
So there's some magical formula that I don't fully understand, but in the 1930s, somebody got together with some other people and decided on how milk should be put into these pools and the formula for pricing milk within those pools. I think the formula has been updated maybe once or twice since the 1930s, but it's a fairly clunky way of trying to make milk pricing fairer to the individual farms within a region and theoretically a co-op can go and pay a farmer more, offer premiums for a higher quality milk, or just a premium for being part of the co-op. No co-ops offered that, or at least our co-op didn't offer that. And in fact, Agri-Mark, which is the a co-op we belong to and DFA, which is a different cooperative, Dairy Farmers of America, put on fairly stringent quotas onto their farms. So they told their farmers, you know, Hey, we have to turn this milk spigot off.
You need to make less, reduce it. You need to make less milk. We're first generation farmers. We started with six cows and we've been growing every year. And March, 2020 was our best month to date. We were making more milk than we ever had. We were still making a teeny tiny little drop in the bucket, but we were making the most milk we ever had. And all of a sudden, our cooperative said, actually you have to make 6% less milk. And they gave us two days' notice before it was implemented and wouldn't even give us the pounds of milk we were allowed to produce. And so COVID, that was really dicey. You can't just go to your cows and, and say, Hey, make less milk. So you either have to just dump the milk down the drain, which we were not comfortable doing, or find something else to do with your milk.
And so we were fairly fortunate. We have a neighbor who raises pigs and we were able to basically just feed his pigs with the extra milk and didn't have to get paid for it.
Liz Russell:
So you're, you're getting cut 6%. That means also the money you're making is getting cut.
Sarah Ficken (Dairy Farmer):
Well, yeah, I mean, and not only is the money we're making getting cut, at the same time, milk price bottomed out. We lost like$ 8 or $9 a hundred weight. So we went from, I wanna say March milk was between 18 and $19 and may milk was closer to $10, a hundred weight. Not only are we allowed to ship less milk, we're getting paid less for as well. So that was really kind of tough. The other thing about milk pricing that, you know, going towards the conversation about SNAP, that was really kind of interesting, the government coronavirus relief program.
I don't remember. I think it was in the CARES Act. They set aside a lot of, or not a lot. Honestly, it probably wasn't enough, but they set aside a fair bit of money for farm boxes with the idea that families in need could access these curated boxes of farm products. And that caused this weird inversion in the formula. And so all of a sudden, not only are we making like $12 a hundred weight on our milk, all of a sudden based upon this formula, the processors are turning around and saying, actually we'd like another $5 of that back. And so milk price over the summer was pretty chaotic. You know, there was a fair bit of government assistance to farms. Something like 40% of farm income this year is coming straight from the federal government, which is so fundamentally broken. Farms are producing food. Food is like one of the basic things you need for life. We shouldn't be in this situation where the people who are raising the food are dependent on the government, basically for handouts and the way the farm handouts were allocated. I don't know that there was a better quick solution, but the solution that they came upon really favored farms that aren't good for the environment that was kind of upsetting.
Liz Russell:
Can you explain that a bit more? Like what type of farms?
Sarah Ficken (Dairy Farmer):
So the formula they came up with for the coronavirus food assistance program, that was the money allocated to farmers to help with this huge price drop, benefited farms that grow annual crops. It did not benefit farms that really grow perennial crops or use other methods that improve soil health. So you got paid based off of corn, acres of soybeans, acres of alfalfa, I think. Yeah. So alfalfa is actually the one perennial crop that they paid on. But again, alfalfa is not necessarily as nice to the soil as some perennial grassland that you had in grass. You didn't get paid upon if you were using some more non-traditional summer annuals that are geared more towards building soil health, those you also weren't paid for. And then in terms of milk production, the bigger you are, the less your bank is going to let you fail. And so big farms had access to a lot more credit than small farms did. And so it just seemed a little bit backwards that the big farms were getting huge payments and the small farms who are getting dinged because they tend to be the ones who pasture their cows and raise perennial crops.
Liz Russell:
If possible, and if you're willing, I wanna tap into the emotion of that. This sounds very stressful to me. And maybe I'm a bit anal retentive <laugh>, but how do you feel when you're first like, oh, okay, you know, I'm going from $19 for a hundred weight to $12. Oh, and now you want $5 back. What is that like?
Chris Ficken (Dairy Farmer):
Do you have to keep it PG-13?
Sarah Ficken (Dairy Farmer):
Yes, Chris.
Chris Ficken (Dairy Farmer):
Okay.
Liz Russell:
I can bleep stuff out. <laugh> I honestly can bleep stuff out. I think we should be frank with people.
Sarah Ficken (Dairy Farmer):
It feels a little raw. How about that? I think, I mean, for me, and there have just been so many layers of COVID. March 13th, we get the phone call saying, Hey, Hannah, can't go to school for the next two weeks, but don't worry. School starts off after spring break, you know, and at the same time we chose to pull Ariel out as well from daycare. They were still open, but we figured if one kid was home, they both should be and transitioning to homeschooling a kindergartener or virtual school with a kindergartner and being a hundred percent of the childcare for a toddler, a large toddler, while also being pregnant is just like its own thing. Running a farm working part-time is hard with kids in tow. And then to add all of the financial stresses and uncertainty on top of it from the backbone of our farm, you know, the commodity milk provides this backbone while at the same time, our direct to consumer business is really ramping up, but butcher shops are working at capacity. So we can't actually get anymore product than what we currently have in the freezer. I really think it's been 11 months of just constantly trying to deal with whatever problem is the biggest right then. And just hoping something else doesn't show up at the same time. I don't know. I feel like we've been in a constant adrenaline response for the last year, basically.
Liz Russell:
That's wild. You introduced a few new things for me, but first I think we should go into this SNAP discussion. You mentioned the government's coronavirus response, but when we talked on the phone, you'd also mentioned your own experience of trying to use those programs yourself.
Sarah Ficken (Dairy Farmer):
Yeah. Sort of the dirty underside of farming is that it's very difficult to be profitable. And when you are profitable, typically as a family farm, that's because you're severely undervaluing the value of your labor. And if you're a third generation farm that that already has their land paid for, and it's just been passed on to you. Yeah. So you don't have any like farm debt or you have employees who are typically undocumented, who are basically paying the cost of your dream. And so that might mean either you're not paying them a living wage or you might be curtailing their ability to leave the farm. You might not be providing adequate housing, but you know, the employees aren't really in a spot to do anything about it because they are undocumented. Or another way you can be sort of offsetting your costs to turn a profit is by using the environment in a way that isn't sustainable.
And so a lot of times, a lot of small farms rely on SNAP or WIC or Medicaid to pay for their health insurance, pay for their food. And so we started the application process for SNAP in the fall. We still have not been approved. I've probably put about 50 hours of work into the application. It's not as straightforward when you own your own business as just going and applying, if you just have a normal job and get a pay stub. And what's really frustrating about it to me is number one, I don't have 50 hours of time to put into this between having to find marriage certificates and certify the fact that we do actually all live in the same house. And finding somebody to witness that document, and find birth certificates and social security cards, and just a crazy amount of information.
That's been a really challenging project to go through and with COVID, you know, I'll call to department of social services with a question and instead of getting a call back or being able to go in person, we'll get a letter 10 to 14 days later with only some of the information. And so it's just been like this crazy back and forth. And we still haven't gotten a determination as to whether we qualify or not. And the other thing that just, you know, we're so fortunate we raise our own needs. We have access to some pretty delicious hamburger. We have our own chickens, so we have our own eggs. We have our own chicken meat. We theoretically have our own milk, although we don't drink milk outta the bulk tank, we do buy milk at the store. We have a vegetable garden, so we can eat out of the garden and eat what we can all year long. It just though seems so fundamentally unfair to live in a system where we're bringing all this good food outta the earth and feeding our neighbors and feeding people far away and not be able to go to the same supermarket and buy it back ourselves.
Liz Russell Narration:
Honestly, I wanna stop this episode right here. This is an extremely important point. It's a fitting conclusion and something really we all should think about, but as an interviewer, I couldn't let this go. And so I'm gonna share the next part too.
Liz Russell:
Can we touch on why farming is so unprofitable or difficult to make a profit? You mentioned farm debt as being a big one. I think we need to tell that story so that people understand that it is systematic and not just sort of individual business choices.
Sarah Ficken (Dairy Farmer):
So we have a food policy and a farm policy that really favors cheap food. And it really specifically favors cheap derivatives of corn. You know, you go to the store to buy cereal, corn as Cheerios, or I guess Cheerios aren't made of corn, but you know, corn is your breakfast cereal.
Chris Ficken (Dairy Farmer):
It’s cheap grains. Yeah. Grains and beans is where is really what it all comes down to. Those are sort of seen as the staples and everything else is sort of luxury. Like, oh, you want fresh tomatoes? Well, that's a fresh fruit, you know, why don't you go have some more corn, you know, grains and beans. There's a lot more to life than grains.
Sarah Ficken (Dairy Farmer):
And so we have this cheap food policy and through government subsidies, you know, government subsidies really do prop up our food system and because our food system and the farms that feed into the food system are basically kept at a level where you can just squeak by on the margins. And by the margins, I mean, whatever the government makes up that year. So you're able to like just squeak by on these margins and there's no real systematic change. In ag, we're not living in a world where it's truly a free market because the government controls pricing structures and so much of what we’re paid. So even if you're making, you know, the best business decisions as you can…
Chris Ficken (Dairy Farmer):
There's still a lot of it out of your control, that should be in your control.
Liz Russell Narration:
So how does this story end? I still haven't found an excellent solution for local dairy. We make our own yogurt and cream cheese every week, sometimes from a gallon we bought at a market or sometimes from the grocery store. And it sounds like that helps farmers too, but it's hardly cut and dry, which is important to understand.
[🎶Theme music🎶]
Liz Russell Narration:
Next time on Was Is Could Be, the finale. If you wanna learn more about my food journey, follow me at @itslizrussell on Instagram, or check out https://www.itslizrussell.com/podcast-blog-transcripts/. If you wanna learn more about Chris and Sarah's farm, New Moon farms, go to newmoondairy.com. You may also remember from earlier episodes that Chris and Sarah run an online inbox for their farm goods at nyfarmbasket.com. Check them out.