Archive for Sunday, October 11, 2009

Dairy farmers carry burden

Low prices, sales threaten producers

Tim Iwig, Tecumseh, who owns Iwig Family Dairy, carries a newborn calf on his dairy farm in October 2009.

Tim Iwig, Tecumseh, who owns Iwig Family Dairy, carries a newborn calf on his dairy farm in October 2009.

October 11, 2009

Advertisement

On the street

What is your favorite food to eat with milk?

Oatmeal raisin cookies.

More responses

Norm Crawford, left, and Tim Iwig sort and load bottles of milk on a cart Wednesday at Iwig Family Dairy in Tecumseh before delivering the milk to Wichita. Iwig could be faced with closing his business because of record low milk prices, reduced sales because of the recession, and high feed and fuel costs.

Norm Crawford, left, and Tim Iwig sort and load bottles of milk on a cart Wednesday at Iwig Family Dairy in Tecumseh before delivering the milk to Wichita. Iwig could be faced with closing his business because of record low milk prices, reduced sales because of the recession, and high feed and fuel costs.

Farm fresh

The Iwig Family Dairy is at 3320 S.E. Tecumseh Road, which is about 16 miles east of Lawrence. To get there, take U.S. Highway 40 west and turn left onto Southeast Tecumseh Road. The farm is about 2.5 miles on the left.

It also can be reached by heading north on Tecumseh Road if traveling to Tecumseh via Stull Road, which is County Road 442 in Douglas County and 45th Street in Shawnee County.

The store is open from 9:30 a.m. to 6:30 p.m. Monday through Friday, and 9 a.m. to 6 p.m. Saturday.

For more information, click on the farm’s Web site, iloveiwig.com.

Courtney Iwig feeds two newborn calves on her family's dairy farm in October 2009.

Courtney Iwig feeds two newborn calves on her family's dairy farm in October 2009.

— It’s 8 a.m. on a chilly, sunny Wednesday morning, and dairy farmer Tim Iwig already has fed and milked about 85 cows, fixed equipment, put the next batch of feed into a giant mixer, and helped with the birth of a new calf.

The 49-year-old farmer’s day started at 3:30 a.m.

In the next hour, he helps full-time employee Norm Crawford load bottles of fresh milk into coolers and then into an SUV to be hauled to Wichita; moves calves around to make room for the new one; and opens and then mans the store for a steady stream of customers.

He says his work won’t be finished until 9 p.m. and that’s not a given.

But without any hesitation, Iwig says he enjoys being a dairy farmer.

“Of course, I do. I spent my whole life trying to get into it, and I’ve spent the last 25 years developing it, and then because of the economy, we are in line to lose it,” he said.

Perfect storm

Iwig is in jeopardy of closing his business, Iwig Family Dairy, because of a perfect economic storm: record low milk prices, reduced sales because of the recession, and high feed and fuel costs.

And he is not alone.

Dairy farmers are hurting worldwide; there have been huge protests in Europe and Australia.

“The cost of production has been higher than the price of milk that farmers are getting,” said Chris Galen, of the National Milk Producers Federation. “They are losing money on every gallon of milk they produce.”

Like every household and business, every farm’s “break even” price is going to be different. In general, U.S. dairy farmers are getting about $1.10 per gallon and they need $1.30 to $1.40 to cover their operating costs.

In Kansas, farmers are earning about $1.13 per gallon and they need about $1.23 to break even and $1.70 to profit.

“The situation simply is you get up before dawn, you work all day and at the end of the day you are actually poorer than you were the day before because you are losing money on the milk you are producing,” Galen said. “It’s like paying to work.”

Mike Brouk, a Kansas State University dairy specialist, said there is a global milk glut.

“Basically, the situation that we are faced with is that we have more milk production than we have of consumption of dairy products. That’s not only here in the United States, but that’s worldwide,” he said. “Until the consumption and production lines align a little better, milk prices probably will remain depressed. It’s just a supply-and-demand thing, and you are dealing with a product that has a very limited shelf life. It’s not like a bushel of corn that you can put in storage for a few years.”

Brouk said the past six to eight months have been one of the toughest times for the dairy industry in 25 years. He doesn’t expect everyone will survive.

“It’s like any other business. Take the auto industry, for example. Is everybody going to emerge from it? Well, no,” he said.

Dairy farms have been on the decline for decades. Kansas is home to 380 farms, down dramatically from about 1,000 a decade ago. In Douglas County the number of farms has dwindled from 17 to seven.

Financing problems

Iwig hopes his farm can weather the storm. His first obstacle is obtaining about $40,000 by Thursday to satisfy the bank. He has an outstanding loan that has been guaranteed by the Farm Service Administration, but the FSA is withdrawing its guarantee because the farm doesn’t have a long enough history of being profitable. Although, he did turn a profit in the first quarter of 2008.

“We need more money to make up some interests, and we don’t have it. If we can’t make it up, then the bank will begin to foreclose on it,” Iwig said.

On Friday, Congress passed an agriculture spending bill that included $350 million in emergency funding for dairy farmers suffering from low milk prices. The bill is awaiting President Barack Obama’s signature.

If Iwig survives this week, it would be welcome relief but likely not enough.

“The money — I seriously think — will be woefully short by the time it is doled out compared to what we have lost in 2009. But, we will take whatever we can get,” he said.

Long history

Tim is the third generation of Iwigs in the dairy business on the same property just east of Topeka.

His sister-in-law Barbara Renner, Topeka, said it would be a crime if he loses the farm.

“I don’t think Tim hardly ever leaves the farm. He is here all of the time,” she said while helping a customer in the store. “He just puts all of his effort in it. This is his whole life — I mean this is his whole life. I’ve never seen somebody who is as dedicated as he is,” she said.

He began in the 1970s by milking his 4-H cows and selling raw milk to people who came and picked it up. After graduating from K-State in 1983, he started his own herd and sold bulk milk to Mid America Dairy Coop and Dairy Farmers of America.

Today, Iwig and his wife, Laurel, own about 85 milking cows and 108 acres. They rent another 60 acres.

The couple have two daughters, ages 24 and 22, and a 13-year-old son. The oldest daughter, Courtney, lives in her own apartment on the property and helps care for the calves. Laurel chips in by running the store and taking care of errands. The Iwigs have three full-time employees and eight part-time workers.

In 2001, they broke ground on a new production facility and in 2005, the company produced its first bottle of milk.

The milk is sold in the region and in almost all Lawrence grocery stores. He sells the most milk — about $15,000 per month — from his farm store. Community Mercantile in Lawrence is his second-best seller.

Iwig said sales dropped by about one-third during the second quarter of 2008. He went from selling roughly 3,000 gallons a week to 2,000. Now, he is sending more milk out in tanker trucks and getting about 83 cents a gallon.

“That is losing money all the way around,” he said. Iwig estimated that it takes about $65,000 per month to operate. “We are cutting corners the best that we can.”

He blames the sales decline on the recession.

“If money is tight, then they are going to reach for the cheap plastic milk,” he said. “My premium quality milk for some people is a luxury, I guess.”

On Friday, for example, a half gallon of 2 percent milk at Dillons, 3000 W. Sixth St., ranged from $1 for the store’s brand to $3.79 for Iwig’s milk. The other brands were less than $2.

Mary Edison, of Topeka, isn’t just willing to pay a higher price for Iwig’s milk, but willing to go the extra distance to his farm store, where she also purchased his butter and ice cream. His milk costs $2.95 for a half-gallon at his store, and $2.25 if you return the milk bottle.

She said the milk tastes fresher and lasts longer than other brands.

“If I get one of these as opposed to another brand in the store, this will last me all month and it won’t go bad,” she said.

Edison wanted to stock up when she heard the farm might be in jeopardy.

“I hope a miracle happens,” she said to Tim.

“Me, too,” he replied.

Comments

kansasmutt 5 years, 8 months ago

Tim . Put a tip jar out in the store and ask for a .50 tip or more on each bottle you sell. Those who care will give and most will drop a nice tip so youl be there for them next year. Also you can bump your price up a bit and those who buy wont care if you still provide a great product and great service. This era of people dropping prices just to satisfy a few is what is killing us small businesses. If you have a product that people like and you provide great service, they will understand you have to make a living too. That is how we run our business, we give 110% and provide the best service around.Our customers understand if we give stuff away, we will be gone, so they are loyal and we end up being friends.Bottom line is. Provide better service and a great product and youl be fine.

Steve Miller 5 years, 8 months ago

Being a lift time cattle rancher i can tell you this. You will all have fresh milk to drink. It just won't be produced by "Joe dairy". The big corporations will take it over like the did the hog production. I was at a livestock sale recently, they could hardly give hogs away, but yet the price in the store has not dropped... go figure. Corporate production will provide. i'll bet they are not losing money. The family farm way of life is not making it nowadays. Big volume producers are taking over this way of life. It is a bad thing as the country's standard of living is being "farmd out" to cheap imports wheither it be milk, pork, fertilizers or whatever. Heck, send all of the production over the water and see where we end up. Just think everytime you shop at the local !!!mart, where does the product come from, not very much from within the states. Shop at home, buy local, not corporate. It will help all of us longterm.

Steve Miller 5 years, 8 months ago

One other thing, you pay for what you get. Mr. iwig's milk i guarntee you is of the highest quality and healthier than the "plastic" cheap milk. What price do you put on your health. I'm gonna go out today and buy some of his milk.... Hang in there mr. iwig, my hogs are rootin for you.

Jennifer Dropkin 5 years, 8 months ago

Better to ask the very large corporations selling the cheap plastic milk where the milk came from, how it's been processed, and what has been put into it.

Then decide whether you want to buy that milk.

Steve Miller 5 years, 8 months ago

Typical, take a pill to replace good healthy home grown products. Don't mix corporate product quality with local home grown quality. The dairy man locally has not seen double prices, the middle man once again has profited. Not our fault... Thats whats wrong ... the original producer sees none of the "huge profits", it's the middle man. Cut the middle man out... buy local, be healthy....

saoirseglen 5 years, 8 months ago

I find it interesting that so many posters on this thread are blaming farmers and ranchers. Not all of them are corporate factory farm producers. Not all of them use artificial hormones to boost production.

If we cannot support the local producers then in the end all we will have are the factory farms that can produce cheap, plentiful, low quality product.

Personally, I cannot digest bovine milk so I consume caprine dairy (goat milk). We also try to buy free range eggs and meat. I also hunt and we grow food in our backyard garden.

The tone of some of the posts sound like more than a few want to punish small farmers and ranchers for not playing the proper political games. If that is the way that you want to deal with things in life, so be it. To me it sounds a petty and short sighted as playing politics with anything else on a daily basis.

Steve Miller 5 years, 8 months ago

saoirseglen, well said.... politics is the key issue.. it makes you involved , like it or not.. or choose to not, buy local and fresh products.... don't be afraid to get away from cheap corporate cut rate products. Maybe some of the suspicous should go out in their back yard and make a garden to educate them selves on how good it is to have good fresh healthy food. I'll be the biggest % of them can't even or do not even raise tomatoes which is the easiest food to grow.... on the other hand, it's to easy to go to !!!mart and pick up some imported cheap stuff.

Steve Miller 5 years, 8 months ago

That does sound greedy.. However, the price is right if someone will pay it. If not, then the law of supply and demand will push the price down. I'd be curious to see if the tomatoe vendor will be in business next year ??

just_another_bozo_on_this_bus 5 years, 8 months ago

"This is OK as long as your consumers are the liberal elite, who can walk in the Merc, not look at the prices and feel good about doing their bit for the environment as they drive home in their SUV."

What is your definition of "liberal elite?" Regardless, the rest of this sentence may be an apt description for some shoppers at the Merc, but a very high percentage of Merc (and farmers' market, etc.) shoppers make a conscious choice to put more of their money into quality, locally grown food, and not into an SUV or a house two or three times as big as they really need, with money left for other "liberal elite" luxuries.

OldEnuf2BYurDad 5 years, 8 months ago

The problem with this story is that the Iwig's are not very representative of the local dairy industry. Few area farmers are devoted to a niche like the Iwigs who are bottling their own milk... and at an exorbitant price.

Talk to the "other" dairy farmers and you'll hear a slightly different story, but with basically the same end: family dairy farmers are all losing money today. This is bad, because once they are gone, there won't be enough producers. Pretty much every area dairy farmer is looking to close down. Then those of us who can only afford "cheap plastic jug" milk will be buying from 5,000 head corporate farms. The crisis is about economies of scale: larger farms have lower expenses, and they will survive.

Steve Miller 5 years, 8 months ago

well i gotta go for now, you guys go ahead and give away the farm to the corporate greed and such..... the lesson here is that years of shipping jobs and industry over the water and imports into the country have yielded the segeration of lifestyles where only the rich can afford quality and comfort. the bottom feeders will continue to work hard and have ethics while at the same time have a means of survival when you all are paying $10.00 a gallon for plastic milk and tomatoes grown that never see dirt. Us farmers all live in the heart of the country where the holy people grow.

roosmom 5 years, 8 months ago

Finally ljw has said something about Iwig! This farm and farm family need help. My family has bought their milk for years and will keep doing so. They are trying to live and give us wholesome good food. I hope there is NEVER the day when we only have industrial farms. This is not about he said she said. It's about keeping local, small farmers in business and buying good local food. Cut out the crap on your grocery list and you'll be able to afford it. You don't have to shop at the Merc there are other options. I say buy smart, not easy. Spend a little time making things in your own kitchen instead of buying ready made. Spend time with your family doing so. We'd all be better off! Let's get back to our roots and stop being lazy, fat Americans that want immediate gratification!

roosmom 5 years, 8 months ago

I'd be more than willing to make a $50 micro loan to this farm!

puddleglum 5 years, 8 months ago

hillbilly jim, you be careful about what you say about wal-mart, that kind of sane talk got flamingdragon disappeareded

I hate everyhting that wal-mart stands for: greedy take-over, no regard for their employees, they leech off of state assistance, corporate welfare, beat-down american manufacturing, build factories in China to compete with americans, etc. etc. I guess these days about everybody knows how awful they are. The only thing really disappointing is the customers that they still have don't care about americans, only themselves-but constantly talk about what a great deal they got on their toilet paper or plastic crap made in China. Me? I haven't spent one dime in a Wal-Mart since 1995.

wish more of you would join me. you republicans too, don't hide behind that b.s. 'free market' crap- you know a b.s. monopoly when you see it, and anyone can see the devastating effect that the high cost of low price has had on the manufacturing in this country.

puddleglum 5 years, 8 months ago

oh, and this story is 'udderly' great. I love a good moooving story to read on a sunday.

just_another_bozo_on_this_bus 5 years, 8 months ago

"After she had finished her lecture to a stranger, she packed the said stroller and groceries into a Ford Excursion, in which her husband had been sitting with the engine running keeping cool. Typical liberal elite behavior"

But why do you choose to label her "liberal?" Couldn't she have just as easily, for all you know, been a conservative? And even if she had an Obama sticker on her car, it sounds like your complaint is her hypocrisy, or at least inconsistency, not her particular political leanings. At any rate, she was just one shopper, and hardly representative of all Merc shoppers, or even the "average" Merc shopper.

pumpkinpatch 5 years, 8 months ago

Well, being married to a former dairyman, I can say that the money we received while he farmed, from 3 am to 530 pm didnt even match what I made at my part time job. Not all dairies use hormones. The high price of a gallon of milk comes from the middle man, not the farmer. Use your brain folks, not what the media tells you, research and learn. You will be surprised what you might find. The Merc has quality foods of all sorts. They want to pay the producer what they are worth, This is called fair trade prices. If our jobs had not been sent overseas several years ago, maybe we'd all have better items to purchase at all stores. And maybe we'd have the good old stores of mom and pop days to shop. People would make a decent living and we would not have all these trashy people expecting a free hand out from the welfare system. Were the heck did they come from anyway?

Yawnmower 5 years, 8 months ago

We should cut off all foreign wars, aid, and trade. We can't even take care of our own. The countries we do business with are either stuck in the dark ages or totalitarian regimes. The end result is that Americans are now pointing fingers at each other wondering where the quality went. This is not WalMart's fault. It's the politcal trade practices being lobbied in congress. If all Walmart had to carry were quality homegrown goods, produced by the best workers in the world, Americans would be better off.

Quality > Quantity

Katara 5 years, 8 months ago

It seems to be a worldwide problem regarding dairy prices. I remember reading this a few of weeks ago.

http://www.msnbc.msn.com/id/32878129/

Cody Ochs 5 years, 8 months ago

I would be very sorry to see Iwig go away, as their milk tastes so much better than any of the other stuff that is called milk these days. And it makes great yogurt. It wasn't so long ago that we had two local dairies producing quality product.

As an aside, do any of you actually RTFA before you post here, or do you just see red at the headline and charge away?

Also, a five-minute visit to the Iwig Dairy website turned up this information: "All of our milk is free of rbST and rbGH injectable hormones. It is also free of any antibiotics, and all the milk that we use comes straight from our own dairy cattle."

Supporting local business is important, but supporting one that is doing most everything right is even more important.

cbhunter575 5 years, 7 months ago

I really am amazed at the american public and how stupid you really are. We have a small dairy farm in central NY and I don't believe in the cow factories but that doesn't mean that all of them are bad and the milk is. We treat our cows with an antibiotic when they are sick and have mastistis which is an infection in the udder with the milk, they are then on that for time it takes to clear it up and then we have a tester that determines when the medicine is out of there blood and then we ship, if we shipped sooner then we should we would have to pay for a whole load of milk, you take drugs when you are sick, do you not take you dogs or cats to the vet when they are sick are they not put on a drug, and then they get better, we take care of our cows like they where our children, the problem is the cow factories milking more and more cows everyday especially when the milk prices go up so there is some of the problem, there should be a cap on how many you can have. And another problem is the american public putting comments on when they don't know what they are talking about, you couldn't do or handle what we do in a day. You take your 16 hour job and cut it in half and then tell me if you can live like that, we are not asking for no more than we deserve, we have been screwed for years and we are not gonna take it any more, we are not asking for handouts and welfare we are asking for a fair price and something we have been needing for a time, do you think that we will actually all the money we lost, if we don't get help soon we will loose everything we have. Dairy farmers are the backbone of america and the american public needs to stand behind us, by speaking out and supporting us and yes buying our product, you can't get anything more healthy for you then milk or milk products, and stop complaing and writing things you know nothing about and asking for handouts for your self, we are not like car and bank coporations we are small americans asking for help!

Commenting has been disabled for this item.