By DOUG GRAVES

Ohio Correspondent

COLUMBUS, Ohio — While the $1 gallon of milk may be a boon for the consumer, it’s been a bust for the American dairy industry’s small to mid-sized farmers.

A worldwide surplus of milk has driven down the price farmers receive to the point where many have lost money for months, even several years, at a time. According to USDA figures, nearly 3,000 U.S. dairy farms folded in 2018, roughly a 6.5 percent decline.

In Ohio, there were still 2,130 dairy farms in October 2018; to date, fewer than 2,000 remain. A total of 85 dairy farms called it quits in Ohio in seven months, all pointing to low milk prices and rising operating expenses.

“The dairy farm exit at the end of 2018 was enormous,” said Dianne Shoemaker, a field specialist and dairy production economics professor with The Ohio State University. “Here in Ohio it’s not just small farms, it’s medium-size and large farms. A lot of these are closed for good.”

In Miami County in west-central Ohio, Jeff and Kathy Knoop of Fletcher will bow out of the dairy industry sometime this year. The Knoops must call it quits, ending a dairy operation that started with Jeff's grandfather. Their 64 milking stalls once operated at full capacity, but four straight years of declining milk prices is sending them out of business.

The Knoops said their farm’s break-even milk price is $16-$17 per cwt. The prices dropped to $12 last February. That’s when the Knoops planned their exit from the dairy operation.

“The bottom line is, we have too many cows and too much milk,” Shoemaker said.

“Financially, they have to make me money. I have to make a living out of it, and it’s not happening,” Jeff Knoop said. “The co-ops will say it’s the milk surplus and it’s now a global market. Everything in the dairy industry has always gone in cycles. You had several years of really good milk prices and then it’d go down, and it’s just been down the last eight years.”

The Knoops sold half their milking cows to a Mennonite farmer in Chillicothe last October. The rest of the cows will be likely sold at a livestock yard in DeGraff, unless another buyer steps in.

In the opposite end of the state in Louisville, a dairy farm operated for four generations by one Ohio family is set to run dry. Dwight Raber of Raber Dairy Farms in Stark County says he has lost money the last two years.

Raber’s farm, which had grown to 500 acres, was founded by his great-grandfather, who came to the United States from Switzerland in 1891. Raber auctioned off his dairy cows and much of the dairy equipment he had accumulated.

His break-even point was at least $16 per 11.6 gallons of milk, but he was stuck at $13.89 the past two years. Several years ago, he added beef cattle to his farm to supplement the dairy. He plans to grow that herd, and sell crops that in the past were used to feed his dairy cows.

Shoemaker said the business has changed dramatically in the past 25 years, with smaller profit margins often driving farms to expand to survive.

“Cheaper milk flowing into the state from Michigan mega-farms has contributed to the pressure Ohio dairy farmers have felt,” she explained. “While 2014 was a boom year for Ohio dairy farmers, it’s been bad for four years in a row.”

She and other dairy trend analysts point out the route that milk takes from the farm to the grocery story is fairly straightforward. And fresh milk, they say, is unlike corn, soybeans, and other farm commodities in that it can’t be placed in storage while farmers wait for higher prices.

For all the rural romanticism attached to it, dairy farming has long been a demanding business, as cows must be milked twice a day, every day, regardless of milk prices or farm costs. Family dairy farms are at the mercy of trade wars, economies of scale, and a complex, often opaque pricing system.