Ag Journal | Concern for small farms fits broader policy shift


Ag Journal
By Candace Krebs

Earlier this year Sarah Lloyd, a dairy farmer who works for Wisconsin Farmers Union, organized a national roadshow that included a stop in Clovis, N.M., to rally solutions for what many now consider a full-blown dairy crisis.

The problem she wanted to highlight wasn’t a shortage of milk. The U.S. is producing more milk per cow than ever before.

But what Lloyd refers to as “no brakes” expansion is pushing out traditional family dairies, many of which have been in operation for multiple generations.

Nationally the number of licensed dairies fell seven percent this past year, but the rate of attrition was considerably higher in states like Michigan and Missouri where smaller dairies are the norm.

While a gallon of milk sold at retail now averages around $3.43, the dairy farmer’s share in terms of profit amounts to only 3 cents of that, according to figures from the Wisconsin Center for Dairy Profitability at the University of Wisconsin.

The situation is toughest for small farms because their operating costs are $4.20 a hundredweight higher than the large mega-dairies, Lloyd said.

“We are in the fifth year of catastrophically low prices that are not covering the cost of production,” she said. “We need urgent emergency action. When we lose a 150-cow dairy, it’s not coming back.”

The dilemma of how to keep small operations profitable isn’t unique to the dairy industry.

Pakou Hang was 15 days old when she came to the U.S. from Laos with her family, fleeing a Communist government takeover and threat of imprisonment in re-education camps.

Like many Hmong immigrants, her family ended up settling in the Midwest. Growing up in Minnesota, Hang’s dad worked at the airport but the family also grew produce on the side to raise enough money to send their seven children to private schools.

While at Yale, where she trained as an investment specialist, Hang was awarded a fellowship to look into the challenges facing Hmong communities across the U.S. In her research, she was surprised to discover 20 to 30 percent of Hmong farmers were leaving the business every year.

Despite their skill at labor-intensive small-scale organic growing practices, many of them simply couldn’t become profitable.

The loss of small family farms has been going on for years, but John Ikerd, a retired agricultural economist who lives in rural Iowa, contends the trend is harming rural communities, reducing consumer choice and runs counter to traditional American values of opportunity for all.

Ikerd, who had a long academic career at institutions like Oklahoma State University and the University of Missouri, eventually came to the conclusion that agriculture was on the wrong track.

Early on he taught his students that family farms needed to get bigger and more efficient, while treating them as a business, not a way of life.

“It was the farm crisis of the ’80s when I began to question that,” he said recently. “Sometimes the hardest thing for us is to admit when something’s not working.”

Ikerd now opposes the push toward mechanization, industrialization, specialization and consolidation, which he says leads to higher levels of financial risk and shifts more of the environmental and social costs from corporations onto farmers and taxpayers.

If rural communities are being gutted, he argues, how can that be a model of agricultural success?

“We forgot that it takes people, not just production,” he said while speaking at the annual convention of the Organization for Competitive Markets in Kansas City.

Mary Hendrickson is a rural sociologist at the University of Missouri who trained under Ikerd while working on her doctorate.

In a global market with low commodity prices, achieving fair payment while providing alternative local and specialty products can be a daunting task, she said.

“How do we preserve the right for farmers to farm this way and consumers to buy this product, when the costs are higher and the efficiencies are lower, and it’s hard to put a dollar value on what having these systems as an option means?” she said.

One tactic farmers are pursuing is banding together to seek cooperative solutions.

That’s the approach Hang took when she returned home and formed the Hmong American Farmers Association in 2011. Drawing on her background as an investment analyst, she raised enough capital to offer financial counseling and loan assistance to farmers, along with marketing and distribution support.

Her organization also established a nonprofit land trust to make growing space available at affordable prices.

Lloyd is also optimistic that her cooperative effort is starting to change the conversation around dairy policy in the U.S.

Her website,, acts like a clearinghouse with fact sheets and proposals for new approaches. Federal dairy support and milk pricing are complex issues, but Lloyd said more people are now talking about what “smart” trade policies look like and how to have effective supply management.

“We’ve moved the needle on this,” she said.

The real shift might be happening on a bigger scale, however. Hendrickson said economists are starting to look at economic development more holistically, with broader concern for ecological and social factors like community health and wellness and local revitalization.

In 2017, the St. Louis Federal Reserve published a comprehensive report, written by Hendrickson and several other experts, including Becca Jablonski, a food systems specialist at Colorado State University, on how communities large and small could harvest opportunity from regional food system development. Their work overlapped with the 2016 presidential election, which raised alarm among the general public about the ongoing urban-rural divide and whether trade and economic policy was benefiting all sectors of society fairly.

“The real reason this shift is happening is so many people are feeling left out,” Hendrickson said. “Now there’s a lot more attention being paid to why we have so much inequality and why our economic development efforts don’t always work out the way we thought they would. By taking a more comprehensive approach to wealth, everybody can see where they fit in and how they can participate.”

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