(AP) – Dozens of dairy farmers from across Vermont drove to Grand Isle on July 2 with the intention of talking about a recent dairy plant closure. Instead, a larger issue emerged: Some dairy processors are giving up on Vermont, and the state is failing to cash in on a national investment in dairy amid a craze for protein.

A recent wave of three dairy plant closures in just two months has highlighted pressures facing the local industry, including high overhead costs and aging infrastructure. As large processing plants move west, where land is cheaper and production is more dynamic, Vermont farms are buckling under consolidation, increased prices and low profitability.

The result? Vermont dairy farms are being left in the dust by the competition from states like Texas where the economics of dairy farming are more favorable.

VTDigger analyzed USDA data and found that dairy farming costs exceed sales by the largest margin in Vermont compared with 18 other states. Vermont farmers face a $8.65 loss per 100 pounds of milk produced, while California farmers, for instance, see $2.49 in profit.

For one Vermont farmer, the costs of overhead stack up to as high as $72,000 per month.

“I’ve spent a lot of time trying to figure out how to budget those numbers, and I can’t move them. It’s really just because of where we’re located,” Kylie Chittenden, who operates a family dairy farm in Shoreham, said at the meeting. Lt. Gov. John Rodgers and other elected officials and state agency representatives turned up to listen to farmers’ concerns.

Chittenden said she pores over the numbers each month when she financially benchmarks her farm against dozens of others across the country. Steep fees unique to operating in Vermont, including transportation surcharges due to poor road quality in the state, leave her at a disadvantage, she said.

As the concerns reach a flashpoint, larger questions loom about the future of the hallmark industry in a state built heavily around it, where dairy racks up $5.4 billion in annual economic impact – nearly 12 percent of the state’s gross domestic product.

“Vermont is definitely at a tipping point, and it’s heartbreaking to see, and I don’t know what the answer is, other than the farmer just can’t meet the demands of the overhead anymore,” said Kassie Stannard, who produces small-scale dairy products for her Vermont homestead.

Dairy in Vermont had a big setback in June when Dairy Farmers of America, a national farmer-owned cooperative, announced that it would shut down operations at its St. Albans milk processing plant and the adjoining St. Albans Creamery & Supply in August, putting roughly 80 employees out of work. The news from the large facility came after similar announcements from other dairy production plants, including HP Hood, which in April closed the Booth Bros. dairy manufacturing plant in Barre, and Franklin Foods, which announced in June plans to shutter its plant in Franklin County. Perrigo, which uses dairy for its products, also said in March that its infant formula production facility in Franklin County would close, affecting more than 400 workers.

“We potentially may continue to see an exodus of dairies from the state,” said Kevin Kouri, chair of the Vermont Dairy Producers Alliance and director of nutrition and sales at Phoenix Feeds & Nutrition. “And the trickle-down effect that that has not only to local communities and what these dairies bring in terms of employment opportunities in rural Vermont, but also the infrastructure and the allied businesses like mine.”

‘Increasing pressures’

For years, the dairy industry has been on the decline in the state, with the number of cow dairy farms decreasing nearly 50 percent over the past decade.

The trend of consolidation – fewer farms but larger remaining ones – has largely been fueled by high overhead costs, leading smaller farms to struggle from low profitability while larger operations are able to produce milk at a lower per-unit cost.

As farms have consolidated, the cooperatives that market the milk have too. DFA, the large cooperative, is one of a few co-ops that control nearly 85 percent of all milk marketed by U.S. producers, according to one study, and it covers large regions, leaving some members to feel a loss of local control.

American dairy consumption, in pounds, has increased by around 60 percent from 2010 to 2024, according to USDA data on per capita dairy product consumption.

‘What can we do?’

As farmers bring their concerns to the fray, elected officials and local agencies say they are seeking to make reforms to support the local dairy industry.

U.S. Sens. Peter Welch (D-Vt.) and Bernie Sanders (I-Vt.) recently introduced legislation aimed at combating consolidation in the industry by creating a government program that helps small and midsize dairy farms manage milk supply and demand. The bill would also match the national dairy production to national demand in an attempt to fight against volatile milk prices.

“The idling of the DFA’s St. Albans plant is heartbreaking news for the plant’s workers, Vermont’s dairy farmers, and this community,” Welch wrote in a statement to VTDigger ahead of introducing the bill. “I’m working with local, state, and federal partners to support plant workers and Franklin County as they navigate next steps.”

Rodgers, the lieutenant governor, said at the Grand Isle meeting that he thinks “there is opportunity sometimes when the door closes,” referring to the national craving for protein, though he didn’t offer a specific plan.