New Jersey’s Dairy Farms Are in Crisis

Since he started milking his neighbors’ cows at age 10, Jared Weeks knew he wanted to be a dairy farmer. At 12, he scraped together $2,100 to buy his first cow, a Brown Swiss. At 19, he rented land in Hunterdon County, near where he grew up, and bought 15 cows.

Today, Weeks has a herd of about 200 cows on 250 acres in Ringoes. He owns 82 of the acres and rents the rest from his wife’s family and from other owners who benefit from a farm-assessment tax cut on the land he works. At 32, Weeks is starting to question his career choice.

“The scariest part for me is seeing these guys who have been in the business for generations selling out,” he says. “These are good farmers, better than what I am. It makes me wonder, If they can’t hack it, how am I going to?”

New Jersey, by most accounts, had more than 500 dairy farms in the 1950s and ’60s. Those days seem halcyon now. In the last 20 years, the dairy industry has been in free fall. In 2000, just 225 dairy farms were left. By 2009, the number had dropped to 103. By last fall, it had plunged to 48. In 2017, sales of milk and of milk cows were a mere $27 million, trailing blueberries ($84 million), peaches ($44 million) and tomatoes ($39 million).

Last summer, amid what he saw as a crisis, Weeks asked the New Jersey Department of Agriculture what, if anything, was being done to help the state’s remaining dairy farmers to hang on. In response, the department organized a statewide dairy summit, held in October. Afterward, Tom Beaver, marketing director for the department, sounded upbeat.

“We wanted to get everyone in the same room and, hopefully, put good opportunities together,” he said. “Everybody’s trying to figure out how we can find solutions for our 48 producers.”

Sadly, five weeks after the summit, a dairy farmer whose family had been milking cows in Sussex County for generations transported his herd of milkers to Lancaster, Pennsylvania, to auction them off, thereby reducing the number of dairy farms in New Jersey to 47.

“We’re dying a slow death,” says Weeks. “And yet you feel so helpless because it’s not something you have any control over.”

That holds true, at least in one respect, across the country. Milk is sold as a commodity. In almost all cases, farmers sell their milk not to consumers, but to processing plants or co-ops that pasteurize, homogenize, bottle and distribute the milk. The price the processors pay the farmers is set by the United States Department of Agriculture through its Federal Milk Marketing Order (FMMO).

The FMMO was established in the 1930s to support farmers facing low milk prices and to assure consumers an adequate supply of milk. Prior to the FMMO, processors controlled the prices.

The FMMO is calculated based on several factors, notably regional, national and international supply and demand.

Photo credit: Matt Rainey

In 2014, processors paid American farmers an average of $24 per 100 pounds of milk (approximately 12 gallons). By early 2015, the FMMO price had dropped almost 40 percent, to between $14 and $16 per 100 pounds.

According to dairy-industry surveys, the nationally averaged current cost of producing 100 pounds of milk is $18-to-$20, meaning dairy farmers lose money on every gallon they produce. Yet the FMMO overall has not budged, and retaliatory tariffs by China threaten to reduce demand for dairy exports.

Meanwhile, consumers have increasingly turned to nondairy alternatives. Since 2012, according to a 2018 national survey by market research firm Mintel, sales of plant-based alternatives like almond, soy and coconut milk have grown 61 percent, while dairy milk sales have shrunk 15 percent. Nondairy milks now constitute a $2.11 billion industry competing for space in supermarket dairy sections.

Although total U.S. milk sales are down, the 2018 survey noted an uptick in sales of whole milk and a big drop in sales of skim milk. The renewed popularity of whole milk—38 percent of the national $16.1 billion dairy market, compared to 29 percent five years ago—might be attributable to studies showing whole milk’s health benefits, including possible links to reducing diabetes and cardiovascular disease.

Still, in New Jersey, where virtually all dairy farms are small and most are family run, turning a profit is increasingly difficult, and not just because of the static FMMO.“New Jersey is a very challenging state for farming,” says the NJDA’s Beaver. “Even with the farmland tax program, our farmers are paying some of the highest property taxes on agricultural land in the country.”

The Farmland Assessment Act, passed in 1964, was intended to stem the tide of farmers selling their arable land to developers. The law established a reduced tax rate for acres being actively farmed. The reduction, however, applies only to those acres, not to farmhouses or any other buildings on the property.

Worse than selling milk at less than it costs to produce is not being able to sell it at all. Across the country, reports have spread of farmers being turned away by milk processors due to lack of demand. Last year, a New York dairy farmer took his own life. It was the third suicide in the last few years among farmers who sell to Agri-Mark, a large dairy co-op based in Massachusetts. Afterwards, Agri-Mark began sending notices to its members on dealing with depression and seeking suicide-prevention counseling.

Though there have been no reports of farm-related suicides in New Jersey, farmers here have received similar notices from the co-ops that process their milk, according to Weeks.

“I’ve seen them,” he says. “Letters that say, ‘We know times are tough. If you’re thinking about killing yourself, here’s a number to call.’ It’s an unfortunate part of the business, but people get pretty desperate.”

New Jersey, for its part, has been urging dairy farmers to explore what Beaver calls “value-added revenue streams.” These include agritourism programs and the production of milk byproducts.

Robert Fulper and daughter Mikayla, fourth and fifth generation farmers, have added farm tours, which often end with visitors buying cheese and yogurt. Photo credit: Matt Rainey

Mikayla Fulper, the 23-year-old herd manager of Fulper Farms, attended the dairy summit with her father, Robert Fulper II, who runs the 1,100-acre farm in Lambertville with his brother Fred. Mikayla, who is among the fifth generation of Fulpers to milk cows in Hunterdon County, has helped steer the 109-year-old farm into the new revenue streams the state has been championing.

A few weeks after the summit, on a grey, blustery Saturday, when most of New Jersey was being threatened by a Nor’easter, Mikayla was leading two families on a tour of the farm.

“We dehorn the females at birth because they can hurt each other or get themselves stuck in a bad situation,” she said, explaining why a calf born hours earlier was wearing a cap of silver duct tape on her head. “We put a salve on to prevent horn growth, and the tape is there to make sure it doesn’t spread to the other calves.”

The tour ended in the 60-year-old milking parlor, where Mikayla deftly attached suction cups to each cow’s four udders, starting the automated milking process that takes five to seven minutes per cow.

In addition to being in charge of more than 200 animals on the farm, Mikayla handles most of the tourist activities, including a farm adventure camp each summer, and helps sell the cheese and yogurt the family produces, multiplying the value of its milk.

But as engaged as she is with her visitors, the recent Penn State grad is clearly most in her element with the 105 cows that line up twice a day to be milked. As she speaks, she pats black-and-white Sassy on the head and lets Sassy’s long tongue lick her jacket.

“I’m passionate about tourism, but slightly more passionate about the cows,” says Mikayla, who expects to one day take over the farm with her brother, RJ, who oversees the crops.

Almost all milk produced in Jersey is sold to one of three in-state processing plants. Each processor comingles it with milk from neighboring states. Beaver says this is necessary because New Jersey produces much less milk than Pennsylvania and New York. So while Jersey dairy farmers would love to wrap themselves in the state’s Jersey Fresh branding campaign that promotes Jersey fruits, vegetables and other farm products, the comingling of milk rules that out.

It’s especially frustrating because Jersey Fresh could give dairy farmers a lift. Just before the summit, NJDA assessed consumer attitudes about Jersey Fresh milk. Beaver says 85 percent of those surveyed said they would be interested in buying such a product.

Joe Calilillo, who owns five ShopRite supermarkets in New Jersey and Pennsylvania, says the Jersey Fresh label has been extremely helpful in selling local produce at his stores.

“If we could produce milk from a local farm, I think there would be a market for it,” Calilillo says. “People want to support the local farmers. They see them as neighbors, and it’s something tangible.”

One of the more pressing topics at the summit was the stranglehold the processors have on Jersey milk. Farmers are not required by law to sell their milk to processors, but as a practical matter, most can’t afford to do their own processing and bottling, let alone distribution.

So far, only one New Jersey farm, Springhouse Creamery in Fredon, is doing that, albeit on a small scale. Springhouse is owned by Peter Southway, a former commercial banker who retired from the corporate world 15 years ago to start a dairy farm with his wife and six children. Every day at 4:30 am and again at 4:30 pm, Southway and his family can be found in their 1930s barn milking their 52 Holstein and Jersey cows, which produce about 275 gallons of milk a day.

Last February, seeking more control over his end product, Southway purchased bottling equipment and a pasteurizing machine to kill pathogenic bacteria. He pasteurizes to levels just above the minimum required by the state. (Unlike Pennsylvania and 11 other states in the country, New Jersey does not allow the sale of raw, or unpasteurized, milk.)

The milk is sold in glass bottles at a roadside stand next to the barn. The stand operates on an honor system. The family also delivers bottles to about 15 stores in the area.

The milk sports a thick layer of cream on top because it is not homogenized. If you want whole milk, just shake it up. Southway says skipping the vigorous mechanical homogenizing process, which vastly reduces the size of the fat globules, makes the milk easier to digest. Scientifically, it’s an unproven claim, but Southway’s aims are nonetheless admirable.

“We’re trying to deliver a product right from the cow, and that is very fragile,” explains Southway, 58. “We don’t pump it a lot, and we heat it to the minimum temperatures for the least amount of time allowable. We don’t add anything to it or take anything away.”

The milk—chocolate or regular—sells for $7 a gallon, with all proceeds going to the farm. By comparison, Southway would receive just over $1 a gallon for milk sold to a processor. “We set our price, we don’t get a price set for us,” he says, noting that consumers today are willing to pay more for a fresh, natural product.
Southway says he invested $150,000 to launch his pasteurizing and bottling operation, saving some money because he already had a building and some equipment in place for the farm’s cheese making.

For Weeks to build a bottling site at his Ringoes farm would, he estimates, cost him twice that amount, and possibly as much as $400,000. That is money he does not have.

Weeks grows all his own feed for his cows and earns extra money by selling leftover crops. But he loses money on every gallon of milk he produces. Lately, the milk checks—issued by the processing plant have hovered around $14 for every 100 pounds of milk, though it costs him $18.50 to produce that amount.

“Each month when we get our milk check,” says his wife, Treacy, 31, “we don’t know what we’re going to get, but it’s always an unpleasant surprise.” She helps make ends meet by boarding horses and running a corn maze for tourists.

Weeks has been going to great lengths, literally, to create at least some products bearing his Hun-Val Farm label. He’s teamed with Jon McConaughy of Brick Farm Market in Hopewell to supply the market with non-homogenized milk he bottles in Lancaster, Pennsylvania. Weeks pays someone to make the 200-mile round trip to deliver and pick up his milk twice a week.

He sells some of the milk to McConaughy to make the ice cream sold at McConaughy’s Red Barn Milk Company in Ringoes. Yet that, plus milk he sells to a few local organic markets, accounts for just 10 percent of the milk Weeks produces. The rest goes to Readington Farms, a milk processor in Whitehouse Station.

For now, NJDA is not looking to upset the milk status quo. “Our market is relatively stable,” says Beaver, referring to overall supply and demand. “We have the benefit of reliability from our processors”—compared, he explains, to states where milk processors have terminated their contracts with longtime dairy providers.

Nor does the state plan to help fund on-farm bottling operations. Describing the state’s role as that of matchmaker, Beaver says such funding would have to come from federal grants or loans or private-equity investments.

For their part, the dairy farmers have no illusions.

“It’s nice to know we’re still being heard and cared about, but the state can only do so much,” says Fulper. “I don’t think there are going to be many solutions.”

As he watches farms around him close, Weeks worries that the state is losing not only the collective knowledge of seasoned farmers, but also the infrastructure that once supported dairy farming. With his own debt exceeding the value of all his cows and equipment, Weeks couldn’t call it quits now even if he wanted to.

“Supplies and repair [services] are non-existent in New Jersey,” he says. “If the machine I use to milk the cows breaks down, I have to call somebody from Lancaster, and it’s $400–$500 by the time they pull into my driveway, because the meter starts ticking as soon as they head out.”

Walking through his barn, describing the personalities and milking characteristics of Paris, his 17-year-old Brown Swiss, and her companions, Milkweed, Queenie, Darla and Pearl, Weeks turns wistful.

“Everything starts to dry up around you, and you don’t have any means to change it,” he says. “Unfortunately, we have a bad habit of trying to solve things after they’re already gone.”