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My family has been farming the same land since 1848, when the potato famine drove them out of Ireland. Over the past 160 years there have been good times and bad, times of prosperity and wars that farmers did well by (armies move on their stomachs) if they weren't drafted. There were floods, droughts, recessions, depressions and green revolutions.

My dad had lots of stories about farming through the great depression, people loosing their land, hobos walking the roads, farmers sending sheep to the Chicago Stockyards and getting a bill because the sale of the sheep didn't even cover the rail shipping.

A year ago farmers were doing OK, grain prices were high, thanks to ethanol. Corn sold for over $7/bu. (Not so many years ago it was selling for under $2.00). Milk prices were over $20.00/cwt, for regular milk.  Organic milk prices were good too, $28.00/cwt, high enough to pay for $10/bu organic corn and provide a fair wage as well.

Of course late last fall it all ended as we knew it would. Some farmers figured the good prices were here to stay, just as there are people who figure gas prices will stay under $2.00 indefinitely.

Milk prices are now about $11/cwt, quite a drop in a few months. While it is easy to compare farm milk prices with milk prices in the store, it doesn't really tell us much. Right now milk price in the store averages about $4.25/gallon (at least according to Wiki answers).  Farmers are getting about $1.00/gallon. Organic farmers are doing better (as long as organic shoppers don't loose their jobs and incomes) organic milk sells for about $6.00/gallon and farmers are getting about $2.00/ gallon.

To really measure how the drop in milk price has affected farmers you need to look at the cost of production. Cost of production uses a formula to calculate all the costs of producing milk, feed, labor, machinery, farm upkeep, taxes etc. USDA figures out an average cost, but nationwide and even among farmers things vary a lot. A neighbor of mine had his cost figured a month ago, it was $18.35/cwt, his price for milk was $12.25/cwt. He was getting $1.04 a gallon, he needed $1.56 to break even. So every day he milks his cows he looses money.

Of course when farm prices start to drop it seems the price of all farm goods drop.  I mentioned the sheep not covering their shipping to Chicago during the depression, well, deja vu  all over again. A farmer told me about a neighbor of his who sold two bull calves a few days ago. Normally a good healthy bull calf will bring $150, so one would expect a check for $200-$300, His check came and it was for $0.66.

There is no minimum wage for farmers, you take what the processor is willing to pay.  I'm sure many will say thats tough, farmers chose to farm, they knew the risks, if you don't like it get another job. That's OK, that's their opinion, as long as they feel no one else has a right to  minimum wage, unemployment, workmen's compensation, a pension and paid health care. And I write this knowing full well that people in all jobs are suffering, not just farmers, but being a farmer, I try and stick to what I know.

As is always the case in a failing economy, people criticize gaps in or the loss of their safety nets and rightfully so. They generally criticize high food prices, blaming the farmer, never realizing that there is no relationship between farm price and supermarket price.

They don't know that farmers have no safety net, no unemployment, no paid health care, no weekends off. They see government subsidy payment totals in the millions of dollars never realizing most of that money goes to a small percentage of the largest farms, some to people who don't even farm. They don't know that the vast majority of that money goes to corn, soy and cotton farms. There is no subsidy for pasture, or vegetables or fruit.

So, expect to see another round of farm sales, the small farms will go first.

Originally posted to jgoodman on Mon Jan 26, 2009 at 07:11 PM PST.

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