Dairy farmer Jim Powers feeds grain to some of his herd of cows at his farm in South New Berlin, New York on Friday.

While the price for a gallon of milk being nearly 20 cents lower than this time last year is good for consumers, one New York dairy farmer has had little choice but to “nail the checkbook to the desk and stop spending money.”

Jim Powers of South New Berlin, New York, knows that his situation is not unique. The entire dairy industry is dealing with the downside of the cycle of peaks and valleys that regularly affects the industry.

The raise in minimum wage being discussed in Albany, New York, and in capitol buildings across the country, would only make matters worse, said dairy farmers in central New York.

The statistical uniform average price paid dairy farmers in the northeast in February was $15.29 for 100 pounds of milk, about nine gallons. During 2015, the average price was $17.14. In 2014, it was $24.22, while in March 2009 the average price was $11.56 per hundredweight. That average price can vary depending on additions such as butterfat content and required deductions such as transportation and advertising.

Powers said the situation is “very bad,” adding that the price drops are part of a multi-year cycle that recently took a “nosedive.”

While the cost of things such as fuel and feed are lower than in recent years, fixed costs remain about the same, Powers said. He estimated that the break-even price is about $20 per hundredweight. 

“There is nothing you can do about it without government intervention,” which only makes the matter worse, he said. “Farmers are losing money at this price.”

Changes in pricing are part of the industry, and fellow dairy farmer Duane Martin of South Kortright, New York, expects to be able to work through it. However, he said, “It’s frustrating to have to work so hard and fall behind.”

With the price below the cost of production and expected to remain flat through summer or later, Martin said, “it makes things tougher.”

The recent state push to raise the minimum wage could eliminate farm jobs, said Powers, adding that he has five part-time employees who work six to 10 hours a week.

“I try to pay them as much as possible,” he said, declining to be more specific. Powers milks about 60 cows, mostly Holsteins, and his farm produces a little more than a million pounds a year.

New York State Gov. Andrew Cuomo has proposed gradually lifting the minimum wage from $9 to $15 an hour by 2021. The New York Farm Bureau is opposed to the plan. Steve Ammerman, the public affairs manager for the New York Farm Bureau, said especially with low wholesale prices, such a move could be disastrous.

With so little “wiggle room,” any increase would make it difficult to stay in business and could lead to employee cuts.

He also cited a report from Farm Credit East, a lender for the agriculture industry in the Northeast, which said: “Additional labor costs resulting from this proposal could clearly impact many farms’ financial viability and affect future decisions to expand or modernize facilities.”

In opposing the increase, the Farm Bureau said in a press release: “We have long held that farmers routinely pay their workers above minimum wage, on average of $12.40 per hour as noted in the Farm Credit East report. But a $15 minimum wage will lift all wages as well as payroll taxes, and create an uncompetitive situation for the state’s farmers in the marketplace. “ 

The proposed change in the minimum wage doesn’t reflect what is going on in the workplace, said Barbara Hanselman, a dairy farmer in Bloomville, New York.

“I don’t think they thought about the effect on agriculture, which has a lot of part-time and seasonal workers,” she said. 

Hanselman said she doesn’t have any outside employees, relying instead on family, but is aware of the effect the proposal would have on others.

Martin, who is also the president of the Delaware County Farm Bureau, said he opposes the proposed minimum wage increase because, among other things, it would drive up the cost of production.

While his farm wouldn’t have any workers affected, it is a matter of principle, he said. Instead, “it makes more sense to try and grow the economy.”

Boshnack writes for The Oneonta (New York) Daily Star.