Dairy producers in New York are facing narrower profit margins and growing worry as labor expenses rise. Milk prices are determined by a formula developed by the United States Department of Agriculture under Federal Milk Marketing Orders, which offer instructions for milk processors when purchasing the commodity. Farmers get compensated depending on the fat and protein levels in their milk. A Cornell University analysis analyzed labor expenditures for 112 farms from 2016 to 2022, revealing a rise from around $730,000 per farm in 2016 to $1.1 million in 2022. Greg Porter owner, of Porterdale Farms in Watertown, feels the true cost is more due to non-soft costs such as grass maintenance, snow shoveling, and transportation.
Milk prices vary, with producers seeing a roughly 20% decline in the last year. It’s tough to tell when they’ll return. Some dairy cooperatives regulate milk output for farmers by removing money if they exceed a specific threshold. Labor is the farm’s second-largest expenditure and one of the few that never goes down. Labor efficiency has also grown, with workers now handling around 54 cows per person, up from 47 cows per person in 2016. In 2022, labor accounted for 13.7% of total agricultural expenditures, down from 15.1% in 2021.
Despite the low milk prices, Porter thinks that the construction of additional facilities would improve matters and raise demand for milk. He feels that farms are essential to the economy and that the state has attracted major firms such as Fairlife.
