Sheffield's Pine Island dairy farm feeling squeezed
As a third-generation farmer, Louis Aragi knows there are going to be hard-luck days.
Aragi and his family manage the Pine Island Farm Partnership and its 600 cows. He continues to stay in the business despite long days filled with manual labor and some recent debt-burdened years.
In 2009, a full year of Aragi's work was wiped out when the high costs of corn and energy caused the farm to lose $400,000.
The Aragi family reacted afterward by reducing the farm's susceptibility to the volatile price of farm goods at a large cost. They borrowed and reinvested $3 million to purchase more farmland used to grow cow feed and invested in energy production.
But all the preparation in the world can't stop Mother Nature. On a recent rainy afternoon, Aragi waved a hand at a window in his kitchen and noted his hay for the cows was drowning outside. It had been a heavy week of rain and more was expected to fall that day.
On a dairy farm, Aragi knows at times the fate of his business is outside of his hands and all he can do is take a back seat and watch.
"You don't know when you're going to be a victim or not," Aragi said.
Pine Island Farm continues to endure, though, even as the number of dairy farms throughout Massachusetts dwindles.
In 1980, there were 829 dairy farms in Massachusetts, but currently there are only 152, according to the Massachusetts Office of Energy and Environmental Affairs. In Berkshire County, there are 21 dairy farms.
The decline can be attributed to a business that demands people walk onto a farm with a lot of resources, including money, and economic changes that includes shrinking profit margins, said Mark Duffy, of the Massachusetts Association of Dairy Farmers.
Still, Duffy said recent action from the state Legislature has increased the likelihood that there will be a second generation of farmers willing to follow in their parent's footsteps and tend to cows.
"[The state is] making it so farmers and the next generation can say, ‘Gee whiz, we have the support to continue help us to farm,' " Duffy said.
A tricky business
Berkshire dairy farmers say a love of farm life has been enough to keep them from selling their cows, but they say it's a tricky business since profit margins can be hit hard by fuel, feed, and equipment bills and other factors that are decided off the farm.
The price of a gallon of milk is set by the federal government. Dairy is produced by both national and international suppliers.
Dairy farmers say after some difficult years because of skyrocketing fuel and feed costs they are seeing better days. But they also say success in dairy farming success isn't evaluated year-to-year, but by roughing out the tough years and squeezing out profits the rest of the time.
Local dairy farmers declined to comment on their annual incomes, but they said they are paying off debt from bad years and savings are spent on expensive pieces of machinery that can cost as much as several hundred thousand dollars. They might earn a profit were they to say goodbye to farm life and sell the property, they say.
Kilmer is exploring the purchase of a new milking parlor, but said it could cost a minimum $200,000 investment and likely more.
"We're pretty well off at this point," said Robert Kilmer, of Twin River Farm in Sheffield, who owns about 130 cows. "It's mainly because it's just me and our two sons. We work seven days a week. Everything goes back into the farm."
In 2006 and 2009, Aragi said Pine Island sustained large debt. To keep the farm started by his grandfather, Thomas Aragi, going, Louis made investments that put the farm on the forefront of technology efficiency -- at a high cost.
As recently as 2006, he sold nearly half of the farm's cows to pay off bills after a tough year.
Still, the family borrowed $1.7 million to purchase 300 additional acres. He also spent $1.3 million for a digester that now powers the air conditioning for the cows in the farm, along with the rest of operations.
Producing energy with the digester using manure has eliminated the farm's energy bill, which could be as high as $8,000 a month during the summer.
State ‘threw a lifeline'
Aragi owns one of the largest dairy farms in Massachusetts. He said after a disastrous 2009 he wouldn't be in the business if not for the state taking steps to support dairy farmers.
In recent years, the dairy industry has been lifted by the state Legislature after it passed recommendations from the Dairy Farm Revitalization Task Force. Among the recommendations passed was an income tax credit to support dairy farmers when milk prices are less than the cost of its production.
"That's a big reason why we didn't throw the towel in," Aragi said. "It's like they threw a lifeline."
In addition, other laws now allow towns to provide tax credits and exempt farms, farm animals and equipment used solely for agriculture. There is also a farm viability program to help farm operations, according to Duffy.
Kilmer, at Twin River Farm, said his guiding philosophy as a dairy farmer is doing "the mostest for the leastest."
There's no room for extraneous expenses in his budget. He purchases only as much fertilizer as he needs. Everything from the cost of food, how long hay is allowed to grow and other criteria is dependent on producing the most milk possible.
Kilmer purchased the farm in 1993. His sons have both said they'd take over the farm, but Kilmer says he'd be reluctant to do so if given a second chance.
"You better love it because you'll be doing it practically in your sleep," he said.
To reach John Sakata:
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