Dairy industry shrinks across Maryland

Andy and Mary Laudenklos each spend more than 70 hours a week caring for their 600 cows, delivering calves and overseeing the milking at their Carroll County dairy farm — and they're also raising three young sons.

The couple and their three-year-old business, East West Farm outside Union Bridge in Carroll County, are struggling. They have doubled the size of their herd and hope to one day procure a robotic milker, all to turn the operation profitable. They are just breaking even now.

Dairy farmers are an increasingly rare breed in Maryland, where such operations are disappearing at a rate twice the national average. Nearly 65 percent of the state's dairy farmers have left the industry in the past 20 years, including 34 operations that shut down last year, according to the state Department of Agriculture.

The decline is driven by the higher cost of land in Maryland, increasing regulations and a global decline in consumption and prices, industry and state officials said. Moreover, dairy operations have shrunk as farmers age and leave the business and too few new farmers replace them.

As some depart farming, others are increasing their herds and operations to achieve a profitable scale, or buying work-saving but expensive equipment. They also are diversifying and trying to appeal to buy-local tastes with craft ice cream and cheeses.

"Staying in this business is definitely a struggle," said Matt Hoff, who represents the dairy industry on Maryland's Agricultural Commission. "Farms are failing all along the East Coast."

Across the state, about 350,000 agricultural acres are devoted to dairy, much of that land in preservation programs and safeguarded from development. But if the industry exodus continues, many of those dairies will no longer be working farms, officials said.

S. Patrick McMillan, assistant secretary for marketing, animal industries and consumer services at the state Department of Agriculture, said "the economics of making milk favors the larger farms in the western U.S." and that farming is suffering like other businesses from a global economy that has been rattled by market fluctuations.

"We are not falling off a cliff, but we are certainly not seeing growth in this industry," McMillan said. "There is a long-term trend toward decline that has occurred over decades."

To stay in business, farmers are trying several tactics.

Hoff, a neighbor of the Laudenklos family, is looking to expand Cold Spring Farm in New Windsor, already one of the state's largest dairies. He oversees the milking of about 800 cows daily, employs 21 full-time workers and raises nearly all his own feed. His family has been in the business for five generations, and with a successful breeding operation and plans to build a state-of-the-art milking barn, he thinks he can keep the farm profitable.

Others are building successful side businesses, with varying degrees of success.

Bobby Prigel, who runs an organic dairy farm in northern Baltimore County, opened a store that sells organic dairy products in January, but only after a long and costly court battle with some of his neighbors. Some neighbors feared increased traffic and argued that building the creamery could pave the way for factory operations in a rural area.

"I am trying to be successful with this, but I am not there yet," Prigel said.

Kate Dallam opened an ice cream shop and lunchroom seven years ago on the edge of her farm just outside Bel Air and has since expanded. In addition to homemade ice cream, she sells other products from her farm as well as meats, eggs and cheeses from several colleagues in Harford County. At the height of the summer season, she employs about 50.

"The store has worked out wonderfully and is a real blessing to the farm, helping us pay for many capital improvements," said Dallam, whose husband, David, manages the dairy side of the farm. "Our timing for getting into this was perfect. People really care about where their food comes from and about preserving farm spaces."

Dairy farmers face all the pressures of most small businesses, with a few additional hurdles, Hoff said. The idea of selling off land and stock can be tempting, especially if a family's next generation has lost interest in farming or if aging farmers are facing retirement, he said.

"The average age of a farmer is 50, and he usually works a 70-hour week," Hoff said.

Hoff, 42, has encountered several obstacles as he tries to secure financing and building permits for a nearly 40,000-square-foot milking barn. It took more than a year to get the go-ahead from state and county officials to dig a new well. He is still waiting for approvals to build the barn while he negotiates for a construction loan.

"With all the fluctuations and risk, this is a hard business for banks to understand," Hoff said.

The challenges did not deter the Laudenklos family. Andy Laudenklos, 28, grew up in Baltimore County and worked in the family construction business. He went to Towson University and ultimately earned a degree in dairy management from University of Wisconsin. He met Mary Rose while training on a 2,000-cow operation in California. They worked a few years on a Pennsylvania farm, saving to purchase their own 120-acre operation, which they named East West Farm in a nod to their bicoastal backgrounds.

He winces when he talks about more than $2 million in start-up costs and $1.3 million in annual operating expenses.

"If you can't be profitable, at least make your losses minimal, if you want to stay in business," he said. "And keep at it all the time."

The fluctuating cost of milk, regulated by the U.S. Department of Agriculture, and cyclical drops in demand have contributed to farmers' anxiety. Meanwhile, the cost of corn, fuel and electricity has soared. Laudenklos has learned to watch the commodities markets and lock in prices for feed and fuel.

"These girls eat a lot," he said of the black-and-white bovines that seem to constantly feed on a greenish mix that is mainly finely ground corn and soybeans.

Seven carts, each with 8,000 pounds of the specially prepared mix, fill the troughs in the milk barn every day. The entire herd consumes about 45,000 pounds daily. Twice a month, nutritionists monitor intake and the cows' health "to make sure what we are feeding is creating for us the most income," Laudenklos said.

They also pay a consultant to keep up with the complicated state and federal regulations and put together a nutrient management plan.

"They tell us when and where we can spread manure, and every year the time to store it gets longer," he said. "Government is taking the average farmer and asking him to do calculus. We don't want to pollute, and we know they are trying to do something good. But it has to be logical and feasible for us, too."

Every 12 hours, as many as 300 cows are milked. Ultimately, Laudenklos would like to buy a robotic milker, a carousel-like rotary device. But that $1 million purchase is on hold for now.

Mary Rose Laudenklos, 25, grew up on a California dairy farm. She oversees the birthing and she tends the new calves, bottle-feeding the newborns with help from her sons. At any one time, they are feeding as many as 50, all with specific dietary needs.

Her husband gave her a rare red-and-white Holstein calf for her birthday, a symbol of future success, she said. The couple feel certain they will stay in farming.

"The industry wants to see young families like us succeed," she said. "The farm community here is really strong. We are working for the future, for our kids."

Her husband added: "You have to love this work, but you also have to make enough money to live. You can't just create debt and you can't borrow money to go to work. This is not about getting rich. It is about providing a good life for your family."


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