The loss of dairy farms in Virginia and the United States is the result of a variety of economic factors affecting the dairy industry. The factors include, but are not limited to, continued milk production increases despite extended low farm milk prices, increased milk production per cow, changing consumer preferences as well as demand for fluid milk and dairy products, an increasing reliance on dairy exports, lack of effective tools for managing milk price and margin risks, shifts in farm to retail market chains, and others.
VFBF is working to identify and develop options that will help dairy farms remain in business.
The VFBF Dairy Advisory Committee and staff have worked with AFBF over the past two years to help develop Dairy Revenue Protection (DRP), a new crop insurance product designed to help dairymen manage price risk. Coverage is based on farm and market conditions within a given state, like Virginia, as opposed to national averages. DRP approval was fast-tracked by USDA and is available for purchase. DRP, which manages price risk, was developed as an alternative to the Margin Protection Program (MPP), which manages margin risk. Farm Bureau also worked with USDA and Congress to make improvements to the MPP in order that the program becomes more functional and affordable. Farm Bureau has worked similarly with USDA to include dairy as an eligible commodity under the new Market Facilitation Program, designed to provide some financial relief for producers affected by foreign retaliatory tariffs. The recent United States – Mexico – Canada Agreement includes provisions that will aid US dairy exports to Canada and Mexico.
VFBF staff continues to work with Virginia dairy farmers pursuing dairy product manufacture and retail sales as alternatives to marketing bulk milk. While these alternatives for marketing a portion or all of one’s milk may not fit with most dairy farms, staff has assisted several farms that now manufacture and sell fluid milk, cheeses, yogurt, and other consumer-ready dairy products.