Connecticut Dairy Industry Faces Economic Challenges Amid Declining Farm Numbers

The dairy industry in Connecticut is experiencing significant challenges, with the number of operational dairy farms having decreased from nearly 1,000 in the 1950s to just 80, according to the U.S. Department of Agriculture. The situation has prompted dairy farmers to call for state intervention to preserve this once-thriving sector.

Brandon Smith, a fourth-generation dairy farmer, highlights the unsustainability of the industry without state support. He notes that milk prices have remained stagnant at levels seen in 1995, while production costs continue to rise. This has resulted in a projected $1 million loss for his farm this year.

To address these economic challenges, a coalition of dairy farmers, including Smith, is advocating for a $20 million agriculture sustainability line item to be included in the state budget. This funding would provide immediate financial relief to farmers struggling with low milk prices and high operational costs.

The average price of milk in the U.S. is currently around $3.43 per gallon, with global oversupply causing prices to fall below production costs. In Connecticut, production costs can exceed $23 per hundredweight, while current prices average $18.74 per hundredweight, creating a financial strain on smaller farms.

Seth Balher, CEO of Oakridge Dairy, supports the introduction of a refundable long-term dairy tax credit, which would activate when milk prices fall below a certain threshold. This measure, alongside an already passed 20% investment tax credit for farm equipment, aims to stabilize the industry.

A bill titled “An Act Establishing A Tax Credit For Dairy Farmers” has been introduced in the state legislature, proposing a $20 million aggregate tax credit. This initiative seeks to mitigate the economic impact of cyclical milk price downturns and ensure the sustainability of the local dairy sector.