Thanks to our pals at Lion’s Tooth Media, the following interview with Dr. Samuel Simon, retired orthopedic surgeon gone dairy farmer, was made possible.  With great bravado and business savvy, Dr. Simon sees the economic mood swings of late affecting milk prices on a global scale pitting small, cooperative farms against mega feed lots for the same share which, if things keep up, will continue to diminish.

Q: What brought on this life change?  You were stable and I would imagine very comfortable as an orthopedic surgeon.  Now you’re knee deep in manure.  What gives?

A: I’m still stable and I’m not knee deep in manure because the farm is a very quality operation but I realized what the farmers were struggling with was the unpredictability of the dairy price.  I have a dairy farm, I milk cows, I milked cows before I was an orthopedic surgeon, I returned to my roots, but somebody had to advocate for the dairy farmer who was just losing their shirt on the commodity price of milk which is determined by the Chicago Exchange.  And I said, we need to segregate quality milk, which is objectively measured by bacteria and white count, and bottle it under the label, Hudson Valley Fresh, distinguish ourselves by quality and the public will buy into quality and local.  We’re seven farms within a 20 mile radius of each other, small carbon footprint, we produce a quality product without the use of any rBST and we process dairy in Kingston, New York, non commingled, totally segregated and delivered from within 36 hours from leaving the cow to our customers.

Q: You’d mentioned the plummeting milk prices.  What are some factors that have contributed to what I’ve read as a 50% decrease in milk prices?
A: There are several factors: One, milk is a global entity because it can be dried into a powder.  A couple years ago Australia and New Zealand went through a drought and there was a decrease in the supply of milk and dry powder worldwide.  This opened markets for the United States, China, and Europe and with this happening, large farms milking 10, 20, 30, 50 thousand cows increased their production to answer the demand.  With the supply/demand equation, the price of milk went up and as they increased their supply and the demand then decreased because of the economy, the global economy, as well as the drought disappearing in New Zealand and Australia, all of a sudden there’s a flood of milk but no market for it.  And China decreased their demand for milk after their melamine scare they decided we don’t need dairy as much as we thought we did and all of a sudden there’s a flood of milk.  Now the price went from $20/hundred weight, which is $.20 cents a pound four months ago, next month it’ll be $11.90.  It costs $20.50 to make a hundred pounds of milk, produced in the Northeast.  If you’re getting $11 for it, there’s only so long you can survive without going bankrupt and the larger the farm, the bigger the cash flow issue and that’s what’s happening right now.

Q: This is a global problem.

A: This is a global problem but obviously we’re aware of what’s happening in the United States because we’re a big dairy producer and it’s gonna have a national effect on all the farms whether small or large because you cannot survive with $12 or $13 milk.

Q: Getting even more local at one time there were 275 dairies in Dutchess County.  What’s been the decline of dairies mainly in New York?

A: The main cost has been the poor price of milk and the unsustainable price.  Let me give you an example, in ‘83 the farmer was receiving $13 for 100 lbs of milk, in 2005 he was receiving $13 for 100 lbs of milk.

Q: You’re talking about government subsidies or the actual sale?

A: No, no this is the actual price. I mean, there’s a federal order that creates a floor but that’s what the coops are paying and that’s what they were receiving in their check in the mailbox was $13 for 100 lbs of milk when it cost $17 to produce it.  So these farmers decided we’re gonna use up our equity in loans so then there’s no more left and then there was a housing boom and land that was good for farming became residential areas and once houses are built, they never return to farming but they gave up the property because they couldn’t afford the inequities of cost of revenue over expense and the price of milk then went up.  They had two spurts of increase in price that was in, I believe, ‘95 there was one and then there was again in 2006 and 2007 but in the phase between the price was never equal to what it cost to produce it.  But this one year of good pricing in 2006-2007, a lot of the huge farms said we can get some return on our capital so let’s raise our production levels and sure enough they flooded the market and bingo the price is just plummeting right off the cliff.  And you know, if you have an industry and you have 48 employees and your income decreases, you can cut a few employees and bring your expenses down.  When you have 5,000 cows, you can’t just tell ‘em, go out to pasture, I’m not gonna take your milk for a while… can’t do that!  Either they’re milkers or hot dogs.  Ya know?  Take your choice.

Q: Well you’re living, you’re surviving, I mean your farm seems to be doing well.

A: Because I was blessed with a good career.  I love dairy farming, I retired, I’m able to subsidize my farm.  The Hudson Valley Fresh Program is a program that gives the farmer $20/hundred weight for all the milk sold so this is a project to maintain a sustainability of dairy.  We’re not gonna get rich but at least we can sustain ourselves with $20/hundred weight and the more milk we sell, the more the farmers get back.  We have a lot of potential for growth, we’re really only selling at about 15% of retail of what we produce, the remainder goes into the coop, into the federal order and for that we receive whatever the federal order price is.  This month is $14, the next month will be $12.

Q: Getting even more specific about what you do, what kind of methods or practices make your farm different, would you say, from the commodity dairies on the whole?

A: Our cows are in barns, we give a lot of TLC, the beddings are cleaned, the environment is clean, the individuals handling the cows are very particular, these are not mass feed lots.  These are individual stalled cows with a great deal of bedding and a lot of TLC and they give quality milk.  For example, we have a criteria for our milk: 1.) Raw count of bacteria.  Acceptable limits is 50,000 bacteria per CC.  Our limits are 5,000.  White count, which is reflected in the milk as well just like in humans, it reflects the health of the animal.  The acceptable upper limit is 750,000, generic milk, organic averages around 425-450,000 in white count.  Our milk, nobody is above 200,000 and my farm in particular is one of the examples as it runs between 50,000 and 100,000.  So there’s a big difference between that quality and what’s acceptable in the average milk on the market today.  Again, it has to do with the TLC, but it’s costly to give that kind of care.  The diet, there’s a lot of hay in their diet which is a normal diet for cows, the cows in the summer go out in pasture, so they have an environment that there were born and by nature, are used to but it’s costly to do it that way and not as labor efficient.  You have huge mega farms which are very labor efficient where one man can milk 200 cows, where as my farm, one man milks 50 cows.  You have efficiency of scale, but the environment is different, the longevity of a cow on my farm averages 8 years.  The longevity of a cow in this country is 3 and 1/2, okay, and that’s because of the environment they’re in.

Q: Can you tell me what happens to the cow once it’s past it’s milk producing prime?

A: It usually becomes hot dogs and hamburgers, Grade A, B.

Q: So typically the dairy cow will be used for beef.

A: Hot dogs, hamburgers.

Q: Dr. Simon, I really appreciate you taking the time to talk to us.  Our guest has been Dr. Samuel Simon founder of Hudson Valley Fresh.  Dr. Simon, can you tell where we can find out a little bit more about Hudson Valley Fresh?

A: Sure!  We have our website which is called HudsonValleyFresh.com and we have a pretty detailed website which will give you the history as well as you can see the farmers that are participating.  And you can find our products at Whole Foods in New York, Jack’s Coffee, Eli’s in Manhattan, Union Market in Brooklyn and I’m gradually expanding into the New York City area.  We’re in the Stop and Shop, in Hannaford’s, Adam’s up in the Dutchess County/Columbia County, IGA’s in Redhook and Millbrook.  It’s a slow, gradual progression but we’re growing every year.  The more the public becomes aware of the quality of the product and that’s it’s mission is sustainable agriculture opens space and people understand that it’s worth $.50-.60 cents more per half gallon because the mission is pure and the quality is there.

Photo by Jim McKnight.