by Ried Frazier
March 10, 2012
Is mighty Marcellus squeezing the milk industry? That's the finding of a new Penn State study. From increased demand for milk to decreased supply-thanks to the Marcellus Shale industry. Researchers at Penn State recently found a big drop in dairy production in areas where gas drilling was heavy.
Tim Kelsey is an economist and the study's lead author. He compared a USDA dairy survey in 2007 with one taken in 2010.
"I was surprised by how large the numbers were on average it was almost 19% decrease in cow numbers and milk production in counties with the most drilling activity compared to a statewide decrease between 4% and 6%," said Kelsey.
The numbers are unambiguous--more wells mean fewer cows. But the results lead to a bigger question.
"What we don't know from the data is exactly why? Why are the cow numbers and why is milk production dropping?" said Kelsey.
Some theories: farmland is being taken out of production by well pads and pipelines. And some farmers have reported contamination of their land. But there's another reason that may explain the drop off.
"One of the stereotypical things I've heard people say is, 'Millionaires don't milk cows,'" said Kelsey.
Simply put, it's hard way to make a living. If you can afford to give it up, why not?
"With dairy farming, there really is no vacation. It's every morning every evening, you gotta feed the cows, you gotta milk the cows. Unrelenting, day after day, week after week," explained Kelsey.
Rich Bednarski gave up dairy farming two years ago. The milking barn at his Washington County farm stands empty. But for 33 years, he milked his family's cows here. Every day. Twice a day.
"Through the summer, when you were bailing hay, you'd get started bailing hay, then you had to stop for milking, then after you were done milking, finish it, you're just totally rushing around," explained Bednarski.
With milk prices low and fuel costs high, Bednarski barely broke even. Some years the farm cleared only $15,000. So when he got his first royalty check, Bednarski decided to sell the herd.
At first, he felt strange when the trucks came to load his animals and take them away.
"But once the cows got to going, I thought, 'This feels pretty good,'" said Bednarski.
A good feeling for Bednarski, but businesses that rely on farmers like him might be feeling something else, says Kelsey -- a pinch.
"It very clearly has an impact on some of the businesses that provide services that farms need such as milk haulers, feed mills, large animal vets," Kelsey said.
And if these support businesses go under, that's bad news for other farmers who still milk cows, says Kelsey.
"It means the remaining farmers who want to stay in production, they are not able to operate as profitably anymore. They either have to do without supplies or have to travel a farther distance for supplies and repairs," said Kelsey.
But new-found wealth might only be part of the story, says Kim Seeley. He's a dairy farmer in Marcellus-rich Bradford County, and he's president of the Pennsylvania Association of Sustainable Agriculture. He blames government policies with running small farmers into the ground. Marcellus wealth, he says, is really the final straw for these farmers.
"It is pushing the gas pedal at the end of a bad, long cycle," exclaimed Seeley.
Lovers of local milk, yogurt and ice cream, don't need to panic at this news. Most of Pennsylvania's farming activity is in the southeast part of the state. And those farms don't have gas from Marcellus shale.