“Risk of total loss for dairy farmers—if US milk prices stay ruinously low for very long—has nothing to do with ... any measures of so-called ‘efficiency.’ The risk of total loss in the US is almost entirely attributable to one thing—the US milk pricing system.” — John Bunting, The Milkweed, 2/09
According to the newest unofficial numbers, it costs a small Maine dairy farmer $24.51 to produce 100 pounds (cwt.) of milk. That’s “short term/ break even”—no return on capital invested—just lights in the barn, grain in the bin, diesel in the tractor.
The US Department of Agriculture also tracks cost-of-production (COP) for Maine. Calculating in some labor costs, some capital costs for machinery and equipment, taxes, general farm overhead, etc. their more complete COP as of Feb. 21 was $34.83 per hundred.
The USDA still figures the “parity price” for commodities like milk. These are similar rates to those paid during World War II and the early 1950s when small farms were the rule and my hometown had many of them—when farmers could buy farmland and new tractors out of the milk check. In constant dollars the January ’09 parity price per cwt. would be $44.50.
Maine dairy farmers are currently getting $15 for Class 1 (bottling) milk. The projected average for the rest of 2009 is less than $16. Basically, it’s been like this for decades. That’s why “farmers” now number less than 2 million and most of them live on “off-farm income.”
Last week’s column featured comments by Jay Greathouse, director of the Willie Nelson Peace Research Institute. Last fall, Mr. Greathouse dared broach the arcane subject of parity pricing and its Depression-slaying effects to urban eaters (Common Dreams, 11/22/08). He argues that it’s time to consider big, and time-tested changes to ag policy. Space permitting, the rest of the interview follows:
RR) You say, “We’ve got to get back to basics and in a generation.” What do you mean? Are you suggesting some kind of crisis here?
JG) I personally don’t know what is credible concerning peak oil. After all, everyone is just spinning oil industry figures in the first place. No transparency and lots of conflict of interest. That said, I’ve personally experienced radical fluctuation in the price of gasoline and I know some people who have to a debilitating degree. That much is real.
In any event, everything based upon non-renewable resources necessarily ends. Post-petroleum agriculture-based local economies will likely look somewhat like pre-petroleum agriculture-based local economies. The real questions revolve around exactly how this coming transition is negotiated.
RR) You speak of an imminent food system “collapse,” based on “putting all our eggs in one agri-biz basket.” That runs counter to the usual story of American ag as the world’s leader in bounty and “efficiency.”
JG) All of the so-called bounty and efficiency was only evidenced by selective statistics, that third sibling to lies and damned lies. The flaunted economies of scale could only be realized at a scale requiring massive resource depletion. For 500,000 generations people lived in balance with nature and then in 15 generations used up the resources for the next 800 generations for the profit of a few. That pretty much shoots down any bounty and efficiency myth except in the case of the few individuals who ran the whole thing.
Figure the total cost of the machines to mine coal and iron. Add the total costs of mills and factories. Factor in the consumption of oil to extract metal deposits and then to disperse it to toxic garbage dumps around the world. All of this is based on non-renewable resources. It has to end sometime. When it does people will rediscover the true bounty and efficiency of once ubiquitous family farms.
RR) Why should eaters be concerned with farmers’ costs-of-production?
JG) ... Without even considering obvious moral imperatives, we physically cannot continue to obtain our food the way we currently do. Part of what we now do is not pay farmers what it really costs to grow agricultural products. Part of what we do now encourages by law that farmers are not paid enough to cover actual costs, much less realize any profit. This is instrumental to driving ever more family farms out of existence to this day.
The large centralized industrialized agricultural sites dependent upon high levels of petroleum consumption tied to a large centralized distribution system dependent upon even higher levels of petroleum consumption will necessarily end. Family farms can cushion the fall, as they did during the Great Depression and more recently during the collapse of the USSR.
Denying farmers parity so that they cannot meet their costs-of-production deprives the USA of the cushion family farms provide. To put it more simply, without economically viable family farms there will be nothing to eat once energy costs and corruption shut down centralized industrialized financialized agriculture.
RR) Can a society that continually squeezes farmers and other workers economically survive?
JG) Well, it has for 10,000 years. The details of specific relations have gradually shifted over time, evolving from a reliance upon slave labor to wide spread manorial serfdom then more recently to wage labor and now it seems nationalized debt servitude may be next.
We now face tremendous opportunities due to the current energy and financial crises coming to a head. Society itself hasn’t been this open to renegotiation since the fall of Rome or the depopulation of Europe during the Black Plague. It’s really up to the farmers and other workers.
RR) What is to be done?
JG) Basically we need to reconstruct the infrastructure for profitable family farms and the local communities they supported. There is a growing buzz around what is called resilient communities. People seem to be getting serious about grass-roots planning. ...
This country was founded on principles that were to protect us from the well known predatory and corrupt tendencies of corporations and financiers. Our government originated with a clear mandate about whose interests it served and whose rights to safeguard.
This country was also founded by slave owners on land stolen through genocide. We have clear unambiguous choices as to which traditions we uphold along with the attending obvious consequences. The choices those alive today collectively make will set the course for the future of humanity as no one who lived before.
Thanks to Jay Greathouse. See willienelsonpri.com.
Richard Rhames is a farmer near Biddeford, Maine. This originally appeared in the Biddeford Journal Tribune.
From The Progressive Populist, April 1, 2009
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