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Milking It 

Book review: Milk Money: Cash, Cows, and the Death of the American Dairy Farm by Kirk Kardashian

Published November 14, 2012 at 10:38 a.m.

To Vermonters who have even a tangential awareness of the state’s embattled small dairy farms, the story of fifth-generation farmer Mike Isham will sound familiar. The Isham Family Farm was once one of 14 dairy farms lining Oak Hill Road in Williston, Isham says. Like their neighbors, his parents finally sold their herd after years of struggle. Isham now runs the 100-acre farm with diversity in mind: His enterprises include blueberry picking, sweet corn production, maple sugaring, hiking and skiing trails for the public. Not a single dairy farm remains on Oak Hill Road.

The Ishams are not among the case studies in Vermont author Kirk Kardashian’s lucidly written Milk Money: Cash, Cows, and the Death of the American Dairy Farm, but the book explains why farms like theirs, with fewer than 500 cows, have a hard time breaking even in today’s dairy industry. Kardashian, who lives in Woodstock, writes that he first pondered the issue during the recession in 2009. Farmers nationwide were getting paid the lowest price for their product in decades — $12 per hundredweight of milk — when they were investing $18 per hundredweight to produce it. Kardashian could see the effect of this on the dairy farm down the road, where he dropped off his daughter every morning. The couple who owned the 75-cow operation had started a daycare because milk wasn’t keeping them afloat.

“I wondered how it could be that such honest, hardworking people could produce a nutritious food almost everyone consumes, and do it well, yet lose money,” Kardashian writes.

Answering that question entails untangling wildly convoluted financial and regulatory issues, and doing so constitutes the heart of this remarkable first book. Kardashian is well-positioned to deliver an authoritative explanation of the mess. A lawyer who practiced real-estate and land-use law for five years, he now works in the communications office of the Tuck School of Business at Dartmouth College. Between 2007 and 2010, Kardashian wrote a number of well-researched articles on the dairy industry (among other subjects) for Seven Days.

To elucidate the problem, Kardashian goes back in time to trace how milk prices first came under federal regulation through the 1937 Agricultural Marketing Agreement Act, which helped establish a minimum price processors could pay farmers for their milk. Next came the 1949 Agricultural Act, which established a price support — that is, a guarantee that the government would buy up farmers’ surplus to keep the price of milk high. The race to produce was on, but the government’s plan was unsustainable: To handle the excess, it started storing cheese in caves in Utah and Kansas.

Today, the federal milk-marketing order is tied not to regional production costs but to, of all things, the volatile Chicago Mercantile Exchange. Meanwhile, farmers are at the mercy of fluctuating grain and fuel prices. In such an unpredictable financial environment, the way to survive is through economies of scale — essentially, adding cows — which means more milk and, ironically, lower prices. It’s a system that works to squeeze small producers like Kardashian’s daycare provider out of the market.

Meanwhile, 30,000-cow factory farms have become commonplace. Milk production has increased exponentially over the last 40 years, even as consumption has steadily declined. And dairy farmers, who typically work 10 to 14 hours a day, receive a galling 15 cents on the dollar for their product.

In a gripping penultimate chapter, Kardashian reveals one more invisible hand fixing prices: Dean Foods, which colluded with Dairy Farmers of America to monopolize the nation’s processing plants over the last decade. Their deals are now being exposed and challenged in court.

Milk Money is a valiant attempt to cover a national industry in 250 pages. Kardashian interviews a range of Vermont farmers (with names changed), including one dual-income couple who are barely surviving and a seventh-generation dairyman who has called it quits. But he also speaks with Mexican migrant workers in California’s San Joaquin Valley, home to many huge factory farms and, as a result, the country’s most polluted air corridor. He traces dairy’s effects on water quality in Lake Michigan, as well as summarizing the legal status of Lake Champlain’s mitigation plan, a story that will be familiar to Vermonters who have been keeping up with local agricultural issues.

Kardashian puts the industry in historical perspective, too. He traces the philosophy of animal rights back to Immanuel Kant; American dairy farming back to its colonial days; and dairy cows themselves back to their Miocene ancestors. While those tangents may sound a bit arcane and unnecessary, Kardashian’s recaps are witty and economical.

He might have exercised more scholarly diligence in his citations, however, which are alarmingly few. Two chapters have none at all, though they contain a wealth of legal histories and statistics, the sources for which it would be helpful to know. And his chapter on animal cruelty won’t placate the more zealous animal-rights activists, partly because Kardashian hopes small farmers can continue to make a living from a centuries-old practice. This in spite of the host of disturbing facts he examines about the process of shaping an animal solely to produce milk — including the revelation that the industry’s preference for Holsteins has rendered the breed inbred and chronically lame.

Kardashian’s legal expertise provides the book’s most stunning insights, particularly when he translates for a lay public the impact of governments’ decisions on the dairy industry. In his chapter on dairy workers, for example, he reveals that the North American Free Trade Agreement included provisions forcing Mexico to eliminate its subsidies for small farms (while the U.S.’ were maintained) and put its communal farming land up for private sale. No wonder Mexican farmers ended up in droves north of the border.

Kardashian does propose a solution to the dairy industry’s madness in Milk Money, but it is not, surprisingly, organic farms, which have had to industrialize to survive just as nonorganic ones have. Kardashian’s model dairy operation is not even a Vermont enterprise, but an upstate New York cooperative called Hudson Valley Fresh, started by a wealthy retired surgeon who figured out that an excellent local product with the right branding could turn the price tide in farmers’ favors. Partly because HVF has an exclusive relationship with its processor, its member farmers weathered the recession and now receive 40 cents on the dollar for their product, rather than 15.

Whether the HVF model is reproducible throughout the industry is doubtful; Kardashian provides a list of factors that have allowed it to thrive, including “access to the New York Metro Area, which is chock-full of educated people with some money.” But Vermont has at least one parallel success story that Kardashian doesn’t mention: Monument Farms Dairy in Weybridge, which supplies Middlebury College and other local clients, and four years ago added Vermont Co-op Milk to its labels.

Monument Farms produces milk through a system of vertical integration: It grows some of its own feed, pastures its calves, and processes and packages its own milk. That means the farm can base its prices on the cost of production rather than on the monthly milk price set by the government. Monument Farms is one of only three processors in Vermont, along with Strafford Organic Creamery and Thomas Dairy in Rutland (which sold its cows in 2005 and now processes other local farms’ milk).

By processing their own milk, dairy farmers take a step toward survival, but Kardashian ultimately argues in Milk Money that such operational changes won’t suffice. What matters is whether consumers are willing to pay a price for milk that actually reflects the work taken to produce it. “Consumption is akin to voting,” Kardashian writes. “Changing the system might be as easy as changing your vote.”

"Milk Money: Cash, Cows, and the Death of the American Dairy Farm" by Kirk Kardashian, University of New Hampshire Press, 253 pages. $27.95.

From Milk Money

The American dairy industry is a sprawling, $150 billion per year business, with reams of statistics, charts, and graphs plotting every data point imaginable. Out of that noise, two signals rise to the surface: milk price and supply. [...] The amount of milk on the market is left to the whim of farmers and the innovations that corporations and land grant colleges can put into their hands. What that means, oftentimes, is that we just have too much milk.

More numbers can tell part of the story. In 1944, the United States had 25.5 million dairy cows. Today, there are about 9 million. Those midcentury cows made a total of 120 billions pounds of milk per year. The modern population pumps out 190 billion pounds. Since 1900, we’ve increased annual per-cow milk yield from roughly 3,000 pounds to 20,000 pounds — nearly a sevenfold rise. At the same time, even though the U.S. population has doubled in the past sixty years, per capita milk consumption has declined. And that is despite the vigorous efforts of the Got Milk? campaign. One effect of this overabundance of milk is that farmers’ margins are razor-thin, leaving them increasingly vulnerable to the price swings that define the industry.

Another effect is less obvious, but more weird. People are drinking less whole milk, and, at the behest of their doctor and the USDA, they’re drinking more skim and low-fat milk. This, in turn, has left a lot of excess milk fat on the market — the raw ingredient in cheese. Instead of going through the front door, with a Got Cheese? promotion, the USDA formed a subagency called Dairy Management Inc. (DMI) in the mid-1990s to covertly push more cheese into the foods we eat.

As the New York Times reported in November 2010, DMI more closely resembles a private corporation than a governmental entity. The chief executive of DMI, Thomas P. Gallagher, earned a salary of $633,475 in 2008, and two other officials made more than $300,000 each. In total, DMI has 162 employees. The budget for this marketing organ, whose goal is to put more saturated fat into American stomachs, tops $135 million per year, paid for largely by a mandatory charge to dairy farmers. Meanwhile, the budget for the USDA’s Center for Nutrition Policy and Promotion, an advocate of healthful eating, is $6.5 million.

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About The Author

Amy Lilly

Amy Lilly has been a contributing arts writer for Seven Days since 2007.


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