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A matter of milkTAHLEQUAH, Okla. (AP)--Anthony Simpson is a hardworking man with simple aspirations. As a fourth-generation dairy farmer, Simpson merely wants to live his life, work his 80-acre farm at Moodys, pay his bills and leave a little something for his children. Unfortunately, like many dairy farmers across the country, he is having a hard time realizing those dreams. The price of raw milk paid to farmers has plummeted to its lowest level in 40 years. At the same time, milk prices in supermarkets have risen steadily. Most people may be under the impression that milk arrives straight from the farm in the supermarket, but that's not the case. Several middlemen are involved, including a milk hauler, and, of course, a dairy processor. "Once the milk is stored in the tanks here on the farm, a milk hauler--in our case the Dairy Farmers of America Southeast Division cooperative--comes and hauls it to any number of processors, including Borden and Hiland,'' said Simpson. "We farmers hire DFA to haul the milk off and are paying fuel surcharges just to get the milk off the farm. Once it leaves, it goes to processors in Bentonville or Fort Smith, Ark., then it comes back here to the stores.'' Simpson said milk prices paid to dairy farmers are based on the price of cheese, even though Simpson himself sends his Grade A product to be bottled as milk. The wholesale cheese price is less than the Grade A milk price, creating just one of many disparities in the industry. "What's worse, is they (processors) tell us we can't meet demand locally, and then truck milk in from a different DFA division, like New Mexico, and then we're stuck paying even higher fuel surcharges,'' he said. Kenneth Lamons, also a fourth-generation dairy farmer, said despite the common perception, processors and cooperatives aren't solely to blame for high milk prices and low returns for dairy farmers. According to Lamons, overproduction is part of the current problem. While there may be a higher local demand than can be met, the overall status across the country is that there's too much milk. Lamons said the overproduction came as a result of the depressed export market for milk. "The dairy industry's changed,'' said Lamons. "In the past few years--well, until this year--we did fairly well, and were exporting a fair amount of milk. But when the world market collapsed, it hurt us.'' Lamons said until last year, dairy farmers were exporting over 14 percent of their product, and had a 2 to 3 percent rate of domestic overproduction. When the demand for export tanked, that left the U.S. with an overproduction rate of close to 18 percent. "That's too much milk,'' he said. "People want to blame this guy and that guy, but it's the economy. Years ago, we never depended on exporting. We've gotten better and produce milk much more efficiently and quickly than ever before. Simpson said he's being paid 1972 prices for his milk but isn't certain how to fix the problem. Raw milk is purchased from farmers by what's known as a hundredweight. In the past six months, Simpson has gone from being paid $23 per hundredweight to $10. Additionally, the price fluctuates constantly, making a business budget almost an insurmountable task. Simpson would like to see a base price for a hundredweight of milk. "I don't need $27, and I've seen as little as $9, and we never know from check to check what it's going to be,'' he said. "If we had a flat rate, a guaranteed minimum, we'd know a little better what we're working with.'' While there seems to be no immediate solution, Simpson remains upbeat. He laughs easily, and takes the trouble in stride. "If I didn't stay upbeat, I'd be in there on the sofa watching 'The Price is Right.' I don't want to have a huge dairy operation,'' he said. "I just want to pay my bills, work my farm, and hopefully, have my two boys take over the business when they're grown.'' "It's going to be tough for people who are 100 percent dairy. I love it, but it's a struggle. The way the milk prices were made was developed in the 1960s. Things have changed so much in 50 years that it needs changing. But it takes going through Congress, and nothing happens quickly.'' Part of the problem in fixing the pricing situation, said Lamons, is that everyone--farmers, bottlers, processors, haulers and grocers--has to agree to it. "The industry has changed faster in the past two years faster than I've ever seen it,'' he said. "It's caught everyone off guard. Should that have happened? I don't know anyone who predicted this year would be like a depression state with the economy.'' When some business people find themselves in financial straits, its easy to shut down, walk away and do something different. But Lamons said farming is a whole different scene. "One of the problems in dairy, we can't just walk away,'' he said. "We have to take care of the cows. I've sold cattle for well over $2,000 per head when industry is good. Right now, I can't get half that. Being in the dairy, you're hung. This has been the longest cycle in my life where things have been bad. "To diversify, we bought a duplex in town and use it as rental property. My wife started an embroidery business out of the house. We pray about everything. We don't make decisions quickly; sometimes it takes a year to study it out. We paid all of our debt down, and our farm is debt-free, which gives you more options.'' Farming, said Lamons, is a lifetime commitment. "You have to be a person who likes to get up and work seven days a week, eight to 12 hours a day. But my family is close to me, and I walk to work. Those cows are a responsibility. They have to be milked twice a day, every day.'' Lamons said while milk pricing doesn't get as much ink as the health care crisis, the problem is just as critical. "If I'd known this was coming, I would've been tempted to get out,'' he said. "But I didn't. Nobody did, but I have to believe it's going to get better.''
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