U.S. Dairy Policy Supports Factory Farms

Mega-dairies, or dairies with over 2,500 cows, bring numerous problems. The animals are confined in horrible conditions. Mega-dairies create air and water pollution and contribute to health problems for nearby residents. While they do create jobs, the jobs are often poorly paid and have bad working conditions. Workers in factory farms are more likely to be injured than workers in infamously dangerous fields like mining. Yet, in the past several decades, the U.S. federal and state governments have pushed for policies that help agribusinesses and hurt small-scale dairy farmers. 

Food and Water Watch has published a report on trends in the U.S. dairy industry, and the central point of the report is that, by supporting the overproduction of dairy, government policies serve large agribusinesses to the detriment of small-scale farmers. Dairy farmers face rising costs, large financial losses, and mounting debt. Lax attitudes towards antitrust laws on the part of both Republicans and Democrats have led to powerful agribusiness monopolies. Curbing overproduction can bring a higher price to farmers through the market instead of taxpayer-funded payments and bailouts, thus saving taxpayers money. It will also reduce the pressure on farmers to increase herd sizes. 

The report describes how, for the past several decades, U.S. dairy programs managed supply to keep prices stable. For example, the Milk Price Support Program (now repealed) bought excess milk, so that surpluses didn’t flood the market and drive the price down. The government used to donate these surpluses to charities or preserve them as shelf-stable dairy products which could be sold when dairy prices were too high. But in the early 2000s, the aim of dairy policy shifted from maintaining a steady supply of dairy products to expanding exports of dairy to other countries. 

In the early 2000s, as trade liberalization occurred across the globe, the U.S. signed trade deals which were championed and even sometimes written by large agribusinesses. Programs that stabilized supply, and therefore domestic prices, were scrapped. Export became the main way to manage oversupply. Today, the U.S., along with a handful of other, developed countries (EU, UK, Australia, and New Zealand), dominate global dairy exports. Import bans, slowing global demand, and a strong U.S. dollar all cause price volatility, to which dairy farmers are exposed. More milk production does not mean more farm income. In order to compete on the export market, farmers must lower their prices. Real milk prices were lower in 2021 compared to 2000. In the 12 years between 2000 and 2021, the average U.S. dairy made a profit just twice. 

After outlining this history, the report notes that consolidation in the dairy industry is happening faster than in other agricultural sectors, which speeds the collapse of small-scale farms. While consolidation began in the 1980s, it accelerated in the 2000s when price supports were withdrawn. The cost of producing milk has risen more than the price farmers can sell the milk at has risen. Small-scale farmers are most affected by long stretches in which they lose money every year.

To survive, small-scale farmers must “get big or get out”: become a factory farm or leave dairy farming. Policies encourage the factory farming option more strongly than they encourage sustainable alternatives such as organic dairy farming. In 1992, only eight operations in the U.S. had more than 5,000 or more cows. In 2017, there were 189 operations with more than 5,000 cows, and the largest ones had more than 25,000 cows. Meanwhile, the number of small-scale operations plummeted.

As farms consolidated, the report says, so did cooperatives. Today, over 80% of milk is marketed by only three cooperatives: the Dairy Farmers of America (DFA), Land O’Lakes, and California Dairies. Large cooperatives give large firms even greater power. However, they are shielded from antitrust legislation. Dairy farmers have accused large cooperatives of acting against farmers’ interests. In a 2022 lawsuit in New Mexico, farmers accused DFA of conspiring with other cooperatives to drive down farmer earnings.

Government policies support factory farms at the expense of small-scale farmers. Farmers in the U.S. pay into a mandatory Dairy Checkoff Program which allegedly funds positive PR and promotion of dairy products. In reality, it funds corporate partnerships and advocacy for dairy exporters. Similarly, states subsidize dairy, but these subsidies don’t create the promised jobs and instead harm small-scale farmers. States sometimes don’t enforce air and water pollution laws on mega-dairies.

Food and Water Watch lays out several recommendations to improve conditions for dairy farmers. They recommend: 

• Restoring dairy supply management policies in the next Farm Bill
• Banning factory farms
• Putting a moratorium on agribusiness consolidation
• Ending conservation-program funding for solutions that don’t really reduce pollution
• Negotiating trade deals that make farmers less likely to export dairy

If these recommendations improve conditions for animals and reduce pollution, animal advocates may consider supporting them. However, to the extent that these recommendations support the dairy industry, they harm animals at the same time.