Struggling dairies get creative, hoping to stay afloat
To rescue her father’s ailing Wicomico County dairy farm, 31-year-old Rebecca Harcum emptied her savings, maxed out her credit cards and took a loan against her 401(k). She poured nearly $100,000 into the effort, and her father, William Blan Harcum Jr., exhausted his savings and credit.
It made little difference to the farm’s growing $600,000 debt.
So, in late January, Rebecca Harcum, a Baltimore financial analyst with the Social Security Administration, logged onto the popular crowdfunding website, GoFundMe, and posted a plea to the world, asking it to save Beechnut Farm.
For decades, the Harcums had been releasing good karma into the Lower Eastern Shore, welcoming tens of thousands of students onto the centuries-old property to learn about farming.
Maybe, Rebecca Harcum thought, people would care enough to donate.
“I mean, it’s not just a place. It’s not just a piece of property,” she said in February, sitting inside her father’s cluttered office. “It’s what we know. And we’re doing everything we can to save it. And this is one of those possible Hail Mary—”
“My dad had a saying,” her 70-year-old father said. “He said, ‘To try where there is little hope is to risk failure. Not to try at all guarantees it.’ We’re going to give this our best shot. We’ll just see.”
Seven months in, the Harcums have raised about $8,000.
They’re one of many families in Maryland whose dairy farms have been pushed to the brink of collapse as several years of low milk prices squeeze the state’s declining dairy industry. Though the number of dairies has been steadily shrinking since the early 1990s, agriculture officials said the last four years, following a brief 2014 peak in milk prices, have been particularly stressful as smaller, indebted farms have fallen deeper into debt, pushing some out of business and forcing many farmers to make difficult decisions about the future of their operations.
A January report from a state dairy advisory council said it cost Maryland farmers about $23.21 to produce 100 pounds of milk in 2017. The average price they were paid in return? $17.54.
Meanwhile, the report said, larger dairies in New York and New England, supported by low grain prices and economies of scale, increased production, putting additional downward pressure on Maryland farms, which are often small, heavily regulated, hemmed in by suburban development and unable to easily expand. In short, many industry experts said, too many Marylanders are milking cows.
Dale Johnson, a farm management specialist with the University of Maryland Extension, said he’s somewhat surprised the state still has dairy farms. In the late 1990s, he figured the rate of farm closures projected the industry’s extinction in Maryland by 2010. There were more than 1,400 of them in 1990. There are roughly 400 now, and the state report predicted another 10 to 20 farms would close this year.
“You got to get (milk) supply down. Got to have more farms go out of business,” he said. “This is going to continue on, and it’s very discouraging.”
Two years ago, Misty Meadow Farm Creamery in Washington County lost roughly $10,000 a month for nearly a year. Its owner, David Herbst, milks about 150 cows, most of it sold to a regional cooperative. Herbst cut his feed by $3,000 per month and his labor, which helped, but he continues to lose money. He’s close, he said, to breaking even.
“I don’t think anybody’s making money milking cows,” he said.
Misty Meadow is a diversified farm with a milking operation, a creamery, a farmers’ market and agritourism attractions, including a corn maze, pumpkin patch, hay rides, animal exhibits for children and a big pavillion for birthday parties. There are places for him to expand.
But the farm has been losing money for several years, and he sells his milk to the Maryland & Virginia Milk Producers Cooperative, a regional association that slashed advance milk checks to its farmers in March as it struggled with cash flow and an expensive reorganization of its business. It’s an anxious arrangement, Herbst said.
His creamery is profitable, but it consumes only 10 percent of the milk he produces, he said. If his farm is to survive, he said he’s got to find other outlets for his milk.
“Honestly, I was very complacent about looking for new markets and expanding because I was comfortable with the labor that we had here, and what we were doing, and how we were doing it,” he said. “And I gotta get out of that comfort zone and move ahead.”
In Garrett County, Randal Beitzel has been milking cows since the late 1990s when he purchased his farm from his father. He’s noticed a particular trend since he began: the cost of running his farm, including the inputs he needs to grow feed, is rising while the return declines. It’s a trend that benefits farms much larger than his.
He’s thought about selling his herd, but his wife enjoys the cows too much, he said. In a worst-case scenario, they would sell the herd — all 150 of them — and focus on more than 320 acres of cropland they manage.
“Sometimes I say it’s not worth it anymore,” he said. “You seem to have to do something extra every couple of years in order to keep farming.”
One way he’s managed to survive: tapping the 100 acres of mountainous woods behind his family’s home — literally.
With the help of a local Amish farmer, Beitzel and his family roamed the mountain two years ago and located every maple tree — about 3,500 of them. More than 5,000 taps were affixed to the trees, which are linked by a breathtaking, interconnected web of plastic tubing that meets at a pumping station near the base of the mountain. It collects the extracted sugar water over about six weeks starting each February. They sell the water to a local entrepreneur who boils it down into salable maple syrup.
They’ve made between $7,000 and $14,000 each year selling the sugar water, Beitzel said. He figures they could make more, perhaps double, by boiling it down themselves. They’ve also started selling a few thousand bales of hay each year, and they put up a grain bin, so they could grow their own feed, saving them about $14,000 in 2016, he said.
It’s all critical revenue on a family farm that generated between $14,000 and $24,000 in gross income over the last two years, they said.
“I don’t know,” Beitzel said. “We’re making it.”
Not everyone is. At its peak, Char-Mar Dairy Farm in Frederick County, Md., was a 680-acre operation launched in 1964 by Charles Brandenburg. It rented another 300 acres in the surrounding area. But all of that quickly changed in January. The farm had expanded over the last decade, building up about $4.6 million in debt, said Charles’s 60-year-old son, Dwight Brandenburg. The farm was appraised at more than $7 million.
Then milk prices collapsed in 2015.
“We had the equity, but we didn’t have the cash flow,” Dwight said.
The farm’s bank pushed them into selling, the family said. More than $700,000 in farm equipment and most of the farm’s 1,100 head of cattle were swiftly auctioned off Jan. 18. The rest of the farm was up for auction the following week until it declared bankruptcy the night before in an effort to keep as much of the farm as it could.
Several farmers from across the region showed up to watch the auction. Char-Mar had been a prominent name in Frederick County dairying for as long as they could remember.
“I heard about the auction in December, and I thought, ‘Ain’t no way,’” said David Moser, another dairy farmer who said he quietly milks about 40 cows in nearby Middletown. “I admired their business when I was growing up. I thought it was pretty neat.”
But Char-Mar was no less immune to years of rising costs and declining revenue.
“I don’t think we ever expected for (milk prices) to go this low, and for this extended period of time,” said Dwight’s son, 40-year-old Mark Brandenburg. “It always comes back. I think you’re always expecting it to turn around. That’s why we’ve hung on this long. … It’s disillusioning, discouraging, frustrating.”
And yet, the Brandenburgs said they’re driven to continue in the dairy business. They’ve given up their rented ground, and all but nearly 200 acres is up for sale, Mark Brandenburg said. Char-Mar is now contracting with an undisclosed company that wants them to raise dairy cows for their genetics. There are 300 heifers on the farm, and the family hopes to expand, he said. They’ll be less directly linked to the milk market, but they plan to continue milking cows.
“Faith in God,” Mark Brandenburg said. “He’s in control, and he works all things together for good.”
The average American drinks about 18 gallons of milk a year, nearly half what the average American consumed in the 1970s, according to the USDA. But milk production continues to rise thanks to improved cow genetics and farm consolidation. Processors have begun pouring much of that excess milk into butter, powdered milk and cheese.
The USDA announced this month a record stockpile of cheese — nearly 1.4 billion pounds sitting in commercial warehouses — and officials project that number to rise.
It’s an environment that favors large farms and imperils small ones like most of those in Maryland. The state Farm Bureau president, Chuck Fry, told a House of Delegates committee that his own dairy farm was struggling in January.
“I refuse to keep going to the bank to borrow money to milk cows that lose $900 a day,” he said.
At Beechnut Farm, there’s been more to worry about than debt. Harcum’s 31-year-old son, William Blan “Trey” Harcum III, is serving a 10-year prison sentence after he got into a fight with his uncle on the family farm and fatally struck him in the head with a tractor linchpin in July 2015.
William Blan Harcum was also diagnosed with esophageal cancer in 2016, requiring serious surgery.
He beat it.
He and his daughter were encouraged by the fundraising effort, and the farm’s debt has fallen to about $525,000 since, but Beechnut Farm’s future remains in doubt. The cows have been sold off, and William Harcum continues to farm a portion of it while the rest is overseen by a family estate.
There have been costly disagreements over debt and inheritance. with the larger Harcum family. Parts of it may be auctioned off, Rebecca Harcum said. It’s been a tiresome, emotional process, she said in February as they were beginning to fundraise.
“I have great depression medication,” Rebecca Harcum said, half joking. “Because I wouldn’t be able to get through without it. He has faith,” she said, looking to her father.
“I have faith in God. And I have my daughter. Who has faith in me” he said, tearing up. “I just don’t like giving up without a try.”
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