Solanco Cows

Cows lounge at the 2019 Solanco Fair in Quarryville, Pennsylvania.

Pennsylvania’s dairy farmers are largely weathering the pandemic but could take steps to shore up their finances, according to a new report from the Center for Dairy Excellence.

Out of more than 700 respondents, 60 farms said they had dumped milk between March and May when the pandemic disrupted supply chains. Seven large dairies were responsible for over half of the nearly 2 million pounds dumped.

Half of dairies rated federal Coronavirus Food Assistance Program aid as very important to mitigating market disruptions. Out of 500 farms that answered the question, only 22 said they planned to leave dairy in the next three to six months.

The study, conducted by Veronica Villena, a Penn State professor of supply chain and information systems, was designed to look at demographics and trends in the industry, including how the pandemic had affected operations.

The center mailed more than 5,000 surveys in June and received responses from 711 farms, including some that had left the dairy business. Farmers from 55 of 67 counties responded by July 31, with the most being in Lancaster County.

The farms in the survey are quite dependent on milk sales, which accounted for 85% of income. Farmers said their most important tools for improving performance are increasing milk per cow, components and milk quality, and reducing production costs. Most farms were cool toward herd expansion, but 40% of the large dairies said it was at least somewhat important.

Only 29% of farms reported having any full-time labor, and the number with part-timers was only slightly higher. While roughly half of dairy workers nationwide are thought to be immigrants, only 5% of the farms in the survey employed Latinos. Pennsylvania Dutch was spoken on 11% of farms.

Most farms had used a nutritionist or financial consultant in the past five years, but less than 30% of farmers calculate their cost of production.

“Knowing an accurate COP is important to understanding dairy finances and is the key to success in participating in risk management,” the report says.

Relatively small numbers said they had participated in risk management programs, though that number may have increased since the survey was completed because sign-ups for Dairy Margin Coverage increased last fall. Dairies with more than 200 cows were the most likely to work with consultants and employ risk management.

Villena will discuss her findings at noon Friday, Feb. 19. Register for the webinar here.

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