Prices climb back up, but worries remain

When New York first shut down all businesses except those deemed essential in March to stem the infection rate of COVID-19, Jodi Smith Krzysiak saw a drop in dairy prices which hadn’t occurred in years.

“When the economy shut down, dairy commodity prices almost immediately fell to 20-year lows,” Smith Krzysiak said.

Six months later, these prices have improved according to Smith Krzysiak, economist and policy analyst for the Upstate Niagara Dairy Cooperative. Although businesses reopening and “buying programs to help the increasing population of those who find themselves to be food insecure” has helped, Smith Krzysiak said, uncertainty remains.

In a virtual press conference held by the New York Farm Bureau on July 21, President David Fisher said dairy prices had suffered at the beginning of the COVID-19 pandemic, describing how “it went from the $18 range to the $12 range.”

And while certain dairy prices were higher now, Fisher was not optimistic about the long-term state of the market.

“Cheese prices are back up now, very strong, but because of the formulas and the way calculations are, what we’re receiving is not up much yet,” Fisher said. “Hopefully it will strengthen a little bit, but depending on the reopening in other states, all of our markets are, I would say, in dire jeopardy.”

 

Price drops take away 'security'

In Upstate Niagara’s Producer Pay Price Forecast for July 31, pricing for the average Western New York dairy products experienced a sharp drop in the spring. April 2020 prices were particularly low, standing at $13.89 per hundredweight, a $2.42 drop compared to April prices for last year, which were at $16.31, according to the forecast. Similarly, prices for May 2020 were at $12.44, a $4.33 drop compared to last year, which were at $16.77.

The current pricing forecast for August and September indicates an increase with prices closer to last year. August prices per hundredweight stand at $18.02, compared to $17.94 for last year. Similarly, September prices are forecasted to be at $17.44 for this year, similar to pricing from last year, which stood at $17.79 for September 2019.

Recent drops in the price of milk has been the biggest change as a result of the new coronavirus, according to Hannah Worden, partner at Will-O-Crest Farms in Clifton Springs.

“We were looking forward to a really good year, after four years, then that changed. So that just took away a little bit of security I guess, this year, for what we’re going to be able to do,” Worden said.

 

Flattening the curve

Aside from price drops, another factor Worden had to consider was preventing possible spread of COVID-19 if a worker had tested positive for the coronavirus.

“So that was a lot of stress in the beginning, but fortunately we were never put into that position,” she said.

Yet COVID-19 still affected other operations, including a nearby veterinary clinic which does frequent check-ups on the animals. According to Worden, someone with the clinic “tested positive, so as an extra precaution all the vets quarantined for a week. So there was one week where we usually have the vet come out to the farm every single week, and there was one week where we weren’t able to have a vet come out.”

Over at El-Vi Farms in Newark, Partner Kim Skellie also reported no cases among his workers, although it hasn’t been easy.

“It’s been a challenge,” he said in a phone interview. “You have to keep on employees to stay on top of that.”

The sanitation protocols implemented at his farm included setting up two separate lunch rooms for workers to ensure social distancing guidelines were followed, a plus for some of his workers.

“The crop people were happy to have a room for themselves,” Skellie added.

Mask-wearing is another component remaining in effect, Skellie said, especially when traveling in a shared vehicle. One person is in charge of sanitizing the steering wheels of the transportation vehicles and the break rooms after use as well. And with 65% of his workforce having their own housing, it’s easier to maintain distancing guidelines.

“It’s like any other business,” Skellie said. “We all work in different places Regardless of the job, it’s fairly easy to stay socially distanced on a dairy farm.”

 

Layoffs and supply shortages

With the recent drop in dairy prices, Skellie admitted he has needed to reduce work hours for his staff by 5% in order to cut back on milk production. He also had to lay off one employee, but is hoping to return to normal by Sept. 1, to “give employees some hope for their paycheck health.”

Dairy farmers also have needed to contend with are disruptions to the supply chain, which has stalled delivery of supplies.

“It has been harder to get a hold of some supplies,” Worden said. Plastic gloves for workers have been particularly difficult to secure, although the farm has also been running into supply issues for pharmaceutical drugs used for the cows.

“We haven’t run out of anything yet but some of the pharmaceuticals we use for the cows for treatments that way have been, I think, a little bit tighter,” she said. She also said the farm may need to use a different treatment for cows in the future if it can’t secure what it normally uses.

While Skellie hadn’t experienced any slowdowns in supplies for El-Vi Farms, he was notified in April that certain items could be hard to find. Skellie said he was told to “order ahead for supplies because it might be difficult to get them,” noting that latex gloves, which are used for milking, could disappear unless a certain amount was ordered.

 

Planning for the future

After the initial closure of schools and restaurants forced farmers to reallocate their supply from large to smaller containers for consumer purchase, the question remains whether schools will still need the same large orders of milk and other products as before. According to Smith Krzysiak, the industry is continuing to monitor that situation.

“We’ll work through that as we know more,” Smith Krzysiak said.

Skellie is concerned about possible cuts to programs such as the Cornell Cooperative Dairy Foods Extension, which has been “helping us.”

“We’re worried about state and local budgets to keep a lot of those things in place to keep some of that rolling,” Skellie added, describing how those services could be cut if no assistance from the federal government arrives.

Skellie also wanted to ensure that the public was aware of dairy farmers’ efforts to prevent any possible spread of the coronavirus on their farms, in order to maintain a constant supply of product to shelves.

“We’re working hard to mitigate the spread and get it out timely and efficiently because it’s more of a failure to us than the public if we struggled with that," Skellie said. "We’re working to make sure that doesn’t happen.”