State of the Industry

Virginia, West Virginia dairy industries see stable future

Editor’s note: As part of our “State of the Industry” series we take a look at the cheese and dairy industry across the United States. Each month we examine a different state or region, looking at key facts and evaluating areas of growth, challenges and recent innovations. This month we are pleased to introduce our latest states — Virginia and West Virginia.

By Rena Archwamety

MADISON, Wis. — Wedged between dairy powerhouses like Pennsylvania and New York to the north and struggling milk industries to the South, Virginia and West Virginia have held their own in dairy production during recent years.

Dairy organizations in both states will attest that their farmers have struggled as much as any through the last year’s low milk prices and down economy. Data through 2008, however, show a picture of stability and only slight declines.

“It looks to me like the decline has been pretty slow compared to the economy. We have a pretty resilient dairy industry,” says Bennet Cassell, extension dairy scientist, genetics and management, and professor of dairy science, Virginia Tech.

Milk production in Virginia has hovered steadily between 1.7 billion and 1.8 billion pounds since 2003, while its dairy herd has dropped from 113,000 head in 2003 to 98,000 in 2008, according to the National Agricultural Statistics Service.

West Virginia, with a much smaller industry, has seen a 35 percent drop in production over the last decade. However, both cow and production numbers have stabilized over the past few years. Milk cows held steady at 13,000 head since 2004 until dropping to 12,000 in 2008, and production also has stayed close to 200 million pounds in the last five years until dropping to 181 million pounds in 2008.

“I’d say it’s starting to level out,” says Bill Aiken, field service representative, West Virginia Farm Bureau. “I think the people who are left are committed.”

• Tradition of farms, growing population

Milk production in Virginia began in earnest during the decades following the Civil War, Cassell says. In northern Virginia, dairies shipped milk into the Washington D.C. area, which traditionally has consumed a large portion of the region’s milk. The industry eventually shifted from the population in the North down through the Shenandoah Valley and the western part of the state.

Today about a third of the state’s dairy industry is located in the Shenandoah Valley, according to Charlie Stallings, professor of dairy science, Virginia Tech. A significant number of the dairy farms in this area are comprised of small herds run by Mennonite farmers, who help bring stability to the state’s dairy industry.

“It’s part of their culture,” Stallings says of the Mennonite farms. “Even when prices are low, they won’t exit.”

Aiken says a few West Virginia dairy farms are in the northern part of the state; some are near the northwest border along the Ohio river, and while land prices have risen, many still are located in the eastern panhandle, close to markets such as Washington D.C. and Baltimore, Md.

Beef and poultry remain the largest agricultural industries in the two states, but dairy traditionally has thrived on demand from the population in the area.

“Dairy always has been a large part of agriculture in Virginia. It’s the No. 3 agricultural commodity produced in Virginia,” says Eric Paulson, executive secretary, Virginia State Dairymen’s Association.

“The Southeast is in milk deficit, from Washington to Florida,” Paulson adds. “We fill our own supply, but usually there’s a demand coming from this area in general ... a lot of the time our milk will flow south, toward the Carolinas.”

Only two or three dairy farms in Virginia have more than 1,000 cows, while the more typical family farms in Virginia and West Virginia milk 100-200 cows and have been in the same family for generations.

Weather in the region is moderate, but it can be unpredictable and vary over areas of the states.

“Weather here lends itself to good milk production,” says Steve Miller, assistant commissioner, West Virginia Department of Agriculture. “It doesn’t get too hot in the summer, with a cooler climate in the foothills. It’s not real hot in the summer and not too cold in the winter. In these weather conditions, you can grow decent crops most of the time as well.”

But while summers may not be as harsh as they are to the south, weather is not always the most ideal for dairying.

“Here in Virginia, the climate can be quite spotty,” Cassell says. “It can be short of rain, and it can be hot. Yet some farmers wouldn’t consider the climate harsh enough to develop good housing systems, and when the harsh weather comes, they suffer. It’s not nearly as hot and humid as it is in Georgia and Florida, but it’s not as good as in western New York state. It’s kind of betwixt and between.”

• Areas of infrastructure

Virginia and West Virginia may not have the largest dairy industries in the East, but they still have a fair number of processing options and dairy industry support.

“There are some areas of the state that are very dairy friendly from the standpoint of climate, soil type, market and dairy supply companies,” Stallings says. “There is an infrastructure in certain areas of the state, and in certain areas of the state, it is a distance. Consolidation of the dairy industry in those pockets has brought infrastructure.”

Farmers in West Virginia also often have to travel a distance to access suppliers.

“The only thing we’re kind of lacking is dairy equipment dealers. There just aren’t any equipment dealers within an hour,” Miller says.

However, Miller adds that one advantage is that West Virginia farmers aren’t too far from processing plants, with a United Dairy Inc. fluid milk plant in Charleston, W.V., and other processors across the border in Virginia.

Most dairy farmers in Virginia and West Virginia belong to Dairy Farmers of America or Maryland & Virginia Milk Producers cooperatives. A few smaller cooperatives also operate in Virginia, and several dairies in West Virginia ship their milk independently to United Dairy. Virginia has nine Grade A dairy processors, including H.P. Hood in Winchester, Va., and Dean Foods-owned plants in Richmond, Mt. Crawford and Springfield, Va.

• Industry support, challenges

A mix of state-sponsored programs and industry organizations help provide support, education and some incentives for dairy farmers in Virginia and West Virginia.

Virginia’s Milk Commission was created in 1934 to supervise the producer price, supply and sale of fluid milk in Virginia. The commission, funded by the state’s dairy farmers, includes four consumer members, two milk producers, one milk processor-distributor, and an administrator who is an ex officio non-voting consumer member. In 2003, the commission was merged within the Virginia Department of Agriculture and Consumer Services.

“The Virginia Milk Commission is another reason why Virginia is a good place for a viable dairy industry,” says Larry Seamans, Virginia member services manager, Maryland & Virginia Milk Producers Cooperative. “The reason for their existence is to insure that Virginia citizens have a fresh supply of wholesome milk.”

The extension service of Virginia Tech also helps support the dairy industry through education. For example, this month the extension is holding a series of five workshops focused on improved dairy cow reproduction.

“I’m very proud of the extension service in Virginia. It’s one of the very strong extension programs in the United States,” Cassell says. “In Virginia farmers have been able to get access to good dairy management practices through the extension, county agents and Virginia Tech. These sources are available and valuable.”

Cassell adds that another valuable service is the Virginia State Dairymen’s Association, which since 1907 has represented the state’s dairy farmers in government policy meetings, to the media, and other venues.

“I think we have a good history of working together cooperatively in the state,” Cassell says.

The University of West Virginia no longer has a dairy extension specialist on staff, but other groups such as the West Virginia Holstein Association, the Dairy Herd Improvement Association and the West Virginia Farm Bureau, along with the West Virginia Department of Agriculture, help provide assistance to West Virginia’s dairy farmers.

The West Virginia Department of Agriculture, for example, makes available the West Virginia Rehabilitation Fund, which provides loans to agricultural entities in need of financing.

“We have helped dairy farmers in the past,” Miller says of the fund. “It’s not a large fund, but it is helpful in some cases.”

As most dairy farms in Virginia and West Virginia are located in the Chesapeake Bay watershed, dairy organizations have focused on giving these farmers a voice in recent proposals to clean up the bay.

“Currently the biggest thing, outside of milk price, is a lot of environmental issues, especially Chesapeake Bay,” Paulson says of primary issues being addressed by the Virginia State Dairymen’s Association. “Agriculture has a seat at the table and should be treated equitably and fairly.”

Seamans says that dairy farmers are good stewards of the environment, pointing to a Cornell study that shows a 63 percent improvement in the reduction of dairy farmers’ carbon footprint. He adds that Chesapeake Bay and cap and trade legislation in their original forms are of personal concern.

“I fear both will have national implications that could affect the country’s ability to produce enough food to feed the citizens of this country,” Seamans says.

Aiken says the West Virginia Farm Bureau also is focusing on Chesapeake Bay and cap and trade laws.

“We’re fighting cap and trade right now in West Virginia, which we think will cost farmers more than it will gain,” Aiken says. “In West Virginia, coal pays over half the taxes. If it hurts the coal industry, it hurts our tax base, which probably would lead to higher property taxes.”

• Growth potential

Miller says West Virginia’s low tax rate could help attract both dairy processors and farmers to the state.

“Most counties still maintain their taxes at a relatively low rate compared to border states,” Miller says. “For processors, our government has done a pretty good job at getting workers comp straightened out, which had deterred them in the past. We’re coming around in those areas to attract new businesses. There also are tax incentives in the state to help processors if they’re interested in locating here.”

Currently West Virginia has one smaller seasonal licensed cheese processing facility on a goat dairy farm, though more cheese processors are coming into the state. Two new cheese plants currently are under construction and awaiting permits in West Virginia — one larger Mozzarella plant in Chester, W.V., owned by Vince Rullo and one aged cheese plant in Paw Paw, W.V., owned by Penny Sagawa, according to Richard Peggs, milk and bottled water specialist, West Virginia Department of Health and Human Services. Additionally, two other Grade A dairy farms are looking to begin manufacturing cheese.

“There’s several counties with small industrial parts, and with land pretty much available with the necessary utilities, that could be used for a dairy plant,” Miller says, adding that land is available for more dairy farms as well.

On-farm manufacturing and value-added dairy products still have a very small presence in Virginia, but various organizations are working to change that. The Virginia Department of Agriculture and Consumer Services recently launched a dairy initiative program with a goal to increase the state’s dairy industry.

“The secretary of agriculture works to promote Virginia agriculture products to the export market. This creates opportunity for Virginia agriculture and encourages growth,” Seamans says, adding that the dairy initiative is part of that effort to find export opportunities.

Dairy experts expect the industry to continue a slight decline but hold fairly steady in both states.

“We will go up and back down. I would tend to think the number would hold steady around 100-120 in the near to intermediate future,” Miller says of the dairy farms in West Virginia.

“It has been slightly declining over the past years,” Paulson says of Virginia’s dairy industry. “But I think there will always be a future. People need milk, and we are ideally located.”

CMN

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