‘It’s getting real, and we’re not alone’

Unsure of future, Nissley family’s faith, community fill gap as dairy chapter closes with sale of 400 cows

By Sherry Bunting, Farmshine, November 16, 2018

Nissley0051.jpgMOUNT JOY, Pa. — Another rainy day. Another family selling their dairy herd. Sale day unfolded November 9, 2018 for the Nissley family here in Lancaster County — not unlike hundreds of other families this year, a trend not expected to end any time soon.

After 25 years of building from nothing to 850 dairy animals — and with the next generation involved in the dairy — the Nissleys wrestled with and made their tough decisions, saying there’s no looking back, although the timetable was not as they planned because the milk price fell again, and some options for transitioning into poultry came off the table.

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The Cattle Exchange put up the tent, and the community came out in-force to support the Nissley family and their sale Friday. Throughout the weekend, they heard from people who bought their cows, telling them they’ll take good care of them. While many went to new dairy homes, a third of the cows at dispersals like this one have been going straight to beef, despite culling a good 10% of the herd in the weeks before the sale.

They began culling hard the past few weeks and on Friday, Nov. 9 offered 330 remaining milk cows and over 80 springing heifers. The Cattle Exchange put up the tent, and the community came out at 10 a.m. to support the family and — as Mike Nissley put it — “watch a life’s work sell for peanuts.”

Breeding age heifers are being offered for sale privately and the young calves, for now, are still being raised on another farm as they would sell for very little in these trying times.

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As we talk outside the sale tent in the cold November rain, the cell phones in the pockets of Mike, Nancy (left) and Audrey are sounding off with outpourings of support. Know that the smiles through brushed back tears are because of the loving care of others, the family’s faith in a loving God, and the knowledge that they took great care of their cows.

Mike and his wife Nancy aren’t sure what the future looks like, but they are surely feeling the prayers, calls and texts of their friends, family, and community getting them through it.

Both Mike and his daughter Audrey Breneman have loved working with the cows, saying the sale felt like a funeral — “the death of a dream” — standing in the light rain outside the sale tent while the auctioneer chanted prices dipping into the $500s and $600s, even struggling shy of $1000 on a cow making 90 pounds of milk with a 54,000 SCC.

Later, a smile crossed his face, hearing the auctioneer stretch for $1700. “That one’s good to hear,” he says, as they headed back into the tent to watch springing and bred heifers sell.

While Daniel Brandt announced their number-one heifers, bids of $1600 and $1700 could be heard on some.

Nissley2011“It was a privilege to make the announcements on those 425 head, and I was impressed with the turnout of buyers, friends and neighbors as the tent was packed,” said Brandt after the sale. “The cows were in great condition and you could tell management was excellent.”

Mike gave Audrey the credit.

Before the rattle of cattle gates and the pitch of the auctioneer began, Audrey addressed the crowd with words that make the current dairy situation real for all who were there to hear them:

“We would like to welcome you to the Riverview Farms herd dispersal and thank you each for coming. Today feels a bit like attending my own funeral where we bury a piece of me, a piece of my family, and a piece of history, where we say goodbye to a lifestyle, to a way of life, to a lot of good times and many hardships as well. But I stand before you today proud to present to you a herd of cows that will do well no matter where they go.

 “This isn’t the end for these ladies, nor is it the end for us. I’ve had the privilege of managing the herd for the last 15 years and though we may not have done everything perfectly, we’ve done a pretty darn good job of developing and managing a set of cows that can be an asset to your herd. Everything being sold here today is up to date on vaccines. Any cows called pregnant has been rechecked in the last 10 days, Feet have been regularly maintained and udder health was always top priority. We culled hard over the last few weeks and have only the cream puffs left as the auctioneer Dave Rama says.

 “Though it feels like the end, it’s only the beginning of the next chapter, and we’re excited to see where God leads us next. Our milk inspector said once: it’s not a right to milk cows, it’s a privilege, and that’s exactly what this herd of cows was, a privilege.”

Her sister Ashlie’s husband Ryan Cobb offered a poignant prayer. The youngest grandchildren not in school, watched until lunchtime as the selling went through the afternoon, and the cattle were loaded onto trucks in the deepening rain at dusk.

As the sale progressed, a solemn reflection could be seen in the eyes of neighbors and peers. To see a local family sell a sizeable herd leaves everyone wondering ‘who’s next’ if prices don’t soon recover.

Nissley-Edits-21.jpg“It’s getting real,” says Mike. “Everyone is focused on survival, but we can see others are shook, not just for us, but because they are living it too.”

He has spent the last two years fighting to protect everything, including his family, “but now I surrender,” he says. “It feels like failure.”

There’s where he’s wrong. There are no failures here, except that the system is failing our farmers — and has been for quite some time — leaving good farmers, good dairymen and women, to believe it is they who have failed, when, in fact, they have almost without exception succeeded in every aspect of what they do.

Nancy is quick to point out that without Mike’s efforts and the family’s faith, “we wouldn’t have gotten this far, but now it’s time to see where God leads us next.”

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The dairy chapter closed last Friday for the Nissley family in Mount Joy, Pennsylvania, but they are looking forward to where God leads them next. Mike and Nancy Nissley are flanked by daughter and herdswoman Audrey (left) and son-in-law and feed manager Matt Breneman and son Mason and daughter Ashlie (right) and son-in-law Ryan Cobb.

“Never have we felt the love and support like we have now from our community,” Audrey relates.

Nancy tells of a group of 20 who met at the farm for a meal the night before: “They prayed with us and rallied around us and supported us.”

Mike feels especially blessed. “We’ve had people just come over and sit in our kitchen with us,” he says. “People say ‘we’re here for you.’ People I never met are reaching out to tell me ‘you’re not alone, you’ll get through it, and there’s life after cows.’”

His bigger concern is that, “The public doesn’t fathom what the real struggles are out here. They have no idea where their food comes from and what it takes to produce it, the hours of work, of being tied to it 24/7/365. As farmers, we don’t have the resources or the time to correct all the misinformation when everyone believes what they see on social media.

“They go in a store and see milk still sold at $4.75/gal. The ice cream mix we buy for our ice cream machine costs the same as it did in 2014, when farm milk prices were much higher. DFA and Land O’Lakes report big annual profits. Where does the money go? Where did our basis go? It used to be $3.00 and now it’s barely 50 cents. There’s not one area to fix if the system is broken,” Mike says further.

“When you really look at this,” he says, “it’s amazing how little farms get for the service they provide, but if the public doesn’t know or understand that service, then they won’t expect the farmers to receive more and will actually make it harder for the farms to do with less.”

Nissley-Edits-25.jpgThe Riverview herd had good production and exceptional milk quality. Making around 25,000 pounds with SCC averaging below 80,000, Mike is “so proud of the great job Audrey has done. Without that quality, and what was left of the bonus, we would have had no basis at all,” he says, explaining that Audrey’s strict protocols and commitment to cow care, frequent bedding, and other cow comfort management — as well as a great team of employees — paid off in performance.

But at the same time, with all the extra hauling costs and marketing fees being deducted from the milk check, the quality bonus would add, but the subtractions would erode it.

He notes further that a milk surplus doesn’t seem to make sense when the bottom third — or more — of every herd that sells out is going straight to beef.

The Nissleys are emerging from the deepening uncertainty that all dairy farm families are living right now in a country where we have Federal Orders for milk marketing, and yet we are seeing an expedited disorderly death of dreams at kitchen tables where difficult decisions are being made.

Nissley2097Trying to stay afloat — and jockeying things around to make them work — “has been horrible,” said Nancy. She does the books for the farm and has a catering business.

Financial and accounting consultants advised holding off the sale for the bit of recovery that was expected by now. But it never materialized, and in fact, prices went backward.

“The question for us became ‘how much longer do we keep losing money hoping that things will get better?” Audrey suggests. “We had to start figuring our timeline.”

She has been the full-time herd manager here for 15 years since graduating from Delaware Valley University with a dairy science degree. Husband Matt has been the full-time feed and equipment maintenance manager.

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Cows have been part of Audrey Breneman’s life as long as she can remember. “They are part of who I am,” she says. Graduating from Del Val with a dairy science degree in 2003 and working full-time for 15 years as herdswoman at then 400-cow dairy farm started from scratch by her parents Mike and Nancy Nissley, have given her options as she moves forward after the sale of the family’s dairy herd.

She loved the cows. Their care was her passion, and the herd record and condition reflected this. But even the strongest dairy passion has limits when tested in a four-to-five-year-fire of downcycled prices.

“It’s too much work to be doing this for nothing,” she says.

With two young children of her own, Audrey could not envision doing the physical work, the long hours, with no sign of a future return that would allow her and her husband to invest in facilities, equipment and labor. How many years into the future could they keep up this pace, continually improving the herd and their milk quality, but feeling as though they are backpeddling financially?

These are the tough questions that the next generation is asking even as their parents wonder how to retain something for retirement, especially for those like Mike and Nancy who are still a way off from that.

We hear the experts say that the dairy exits are those who are older and deemed this to be “time,” or that the farms selling cows are doing so because their facilities have not been updated, or because they don’t have a next generation interested.

These oversimplified answers seek to appease. The truth is that in many cases — like this one — there is a next generation with a passion and skills for dairy farming.

The problem is the math. It doesn’t add up.

How are next generation dairy skills and passions to take hold when the market has become a flat-line non-volatile price? There are no peaks to go with the valleys because the valley has now become the price that corresponds directly with the lowest cost of production touted by industry sources and policymakers when talking about the nation’s largest consolidation herds in the west — and how they are dropping the bar on breakevens.

How are the next generation’s dairy passions to take hold when mailbox milk checks fall short of even Class III levels in much of the Northeast where farms sit within an afternoon’s drive of the major population centers

In Audrey’s 15 years as herd manager, there have been other downcycles, but they were cycles that included an upside to replenish bank accounts and hope. The prolonged length of the current downcycle brings serious doubt in the minds of young dairy producers about a sustainable future, but are the industry’s influencers, power centers and policymakers paying attention?

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Cows congregate in the two freestall barns and in the meadow by the road as a holding area during the Nissley family’s sale of the dairy herd Friday while the milking team milks for the last time in the nearby parlor.

Like many of her peers transitioning into family dairy businesses, the past four years have been draining. Much depends upon how far into a transition a next generation is, what resources they have through other diversified income streams in order to have the capital to invest in modernizing dairy facilities and equipment.

Without those capital investments, these challenging dairy markets combine with frustrating daily tasks when there is insufficient return to reinvest and finding and securing sufficient good labor also becomes an issue.

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As difficult as it is for the Nissley family, they are also concerned for their family of employees. The herd’s production and excellent milk quality are very much a team effort, they say, and the team of milkers pictured with Audrey (l-r) Manuel, Willie and Anselmo were busy Friday with the last milking at Riverview as cows came through the parlor all day ahead of their sale and transport.

The Nissleys are quick to point out that as hard as this has been for their family, it is also hard on their family of employees. They, too, are hurting.

“This is what I wanted to do all my life. It was our dream when we were married. I had a love for it and Nancy had a love for it,” says Mike, whose dairy dream was ignited by visits to his grandfather’s farm. Nancy grew up on a farm too, but the cows were sold in the 1970s.

The couple worked on dairy farms in the early years and saved their money. In 1994 they started dairying on their own farm with 60 cows. In September 2007, they moved to the Mount Joy location and began renovating the facilities for their growing herd.

Cows have been part of Audrey’s life as long as she can remember. “They are part of who I am,” she says, adding that she is glad to have her dairy science degree, along with the dairy work ethic and experience. “Here we are selling the cows, and I have opportunities to consider that I may not otherwise have. That degree is a piece of paper no one can take away from me.”

As the Nissleys closed this chapter Friday, they turn to what’s next. Nancy says she looks forward to being able to do things together they couldn’t do before while being tied to the dairy farm. As to what they will do on the farm, she says “God has not steered us wrong yet. Yes, it’s scary, but we also have faith that He is in this.”

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Mike and Nancy Nissley aren’t sure what the future looks like, but they say they are feeling the prayers, calls, texts and support of friends, family and community. That’s what is getting them through these days.

Mike has also gained new perspective. He observes that for any dairy family that has a future generation with a long-term goal, it makes sense to stay in and try to ride this out. “But if you have any question about that long-term goal, have the tough conversations about your options.

“It’s easy to lose perspective. For the last two years, I lost my perspective because I was so focused on survival. That’s what I take away from this, the importance of getting perspective. We are first generation farmers. We started with no cows 25 years ago and have 850 animals today. It’s hard to see it all dismantled and be worth nothing. But we’re not second-guessing our decision.”

Talking and praying with friends and acquaintances, Mike believes that, “We go through things, and we can’t let it drag us down but use it for God’s glory.”

Under the milky white November sky spilling rain like tears, he says that while the sale “feels like the death of a dream, I know I’ve been blessed to have shared this dream with my wife and to work alongside our daughter and to see the great things she was able to do with this herd, for as long as we could. I’m thankful for that.”

The sale started at 10 a.m. Over 400 cattle were loaded in the deepening rain at dusk as the dairy chapter closed at Riverview Farm, Mount Joy, Pennsylvania, and two generations of the Nissley family said there’s no looking back, only forward to where God leads them next.

 

 

 

 

 

 

 

 

Will ‘local’ focus stem tide of milk displacement?

PA-preferred (1).jpgHarrisburg Dairies, Schneider’s Dairy step up for milk from at least 9 of 42 dropped Pa. farms

 

(Author’s note: Farmers whose milk has been displaced in 8 states are in various stages of determining their futures. Some are exiting the dairy business, a few have been picked up by cooperatives, or as in the case of this story, by processors. Some are resorting to marketing milk with brokers at much lower prices. In addition to PA Preferred, Tennessee’s legislature is working on a state label for milk.)

By Sherry Bunting, Farmshine, March 30, 2018

BROWNSTOWN, Pa. — In the days following the “Save Pennsylvania Dairy Farms” town hall meeting in Lebanon March 19, some breakthroughs came for 9 of the 42 Pennsylvania farms notified by Dean Foods that their contracts will end May 31.

Harrisburg Dairies, based in Harrisburg, picked up 5 (possibly 9) of the 26 farms let go by Dean’s Swiss Premium plant in Lebanon.

Schneider’s Dairy, based in Pittsburgh, picked up 4 of the 16 farms let go by the Dean plant in Sharpsville.

Both Harrisburg Dairies and Schneider’s Dairy source their milk through direct relationships with local family farms, and they use the PA Preferred logo on their milk labels, signifying it was produced and processed in Pennsylvania, which also means the state-mandated over-order premium paid by consumers is passed back through the supply chain.

“It really made the decision for us, when it came to needing our milk supply to be independent producers that we can have a direct relationship, monitor and inspect ourselves,” Alex Dewey told abc27 News, Harrisburg about the PA Preferred label and their decision to add five of the displaced farms to their Pennsylvania-sourced milk. Dewey is the assistant general manager of Harrisburg Dairies.

Likewise, Schneider Dairy president William Schneider told Clarion news that, “We really didn’t need the milk, but… these people were going to lose their livelihood. I didn’t want people to be out on the street, so we did what we could.”

Both dairies appear to have chosen their 4 and 5 farms based on hauling routes and proximity to their respective plants.

Meanwhile, the situation is in limbo the remaining 12 farms in western Pennsylvania, along with the handful of Ohio and New York producers, affected by volume adjustments at Sharpsville and New Wilmington as well as 21 in eastern Pennsylvania affected by volume adjustments at Dean’s Swiss plant in Lebanon.

In addition, producers affected by these notices in Indiana, Kentucky, Tennessee and the Carolinas are also currently still seeking markets. A few in the Southeast have made plans to sell, but overall, there are still about 100 dairy farms displaced by Dean’s system-wide consolidation and Walmart’s new plant coming on line in May in Fort Wayne Indiana.

Some other marketing factors are emerging.

For example, the Dean Sharpsville plant continues to notoriously bring in loads of milk from Michigan. The company confirms that the 90-day notices sent Feb. 26 to over 100 dairy farms in 8 states, did not include Michigan.

The Sharpsville plant was referenced specifically in the December Pennsylvania Milk Marketing Board (PMMB) hearing where the Pennsylvania Association of Milk Dealers and Dean Foods requested a significant reduction in the producer over-order premium to its lowest level in 17 years. This change to a 75-cent mandated premium went into effect for wholesale and retail milk price minimums January 1.

At the time of the hearing, both John Pierce and Evan Kinser of Dean Foods testified that retailers are getting accustomed to bargain-priced milk elsewhere with documented retail milk prices offered to consumers in other states as low as 87 cents per gallon. Kinser testified that this new reality made Pennsylvania’s high state-minimum retail milk price an increasingly attractive destination for milk bottled elsewhere.

Kinser had further testified that the pressure from the increasing influx of out-of-state milk was making it difficult for milk produced in Pennsylvania to compete for retail (and apparently farm level) contracts.

Kinser also indicated that the mix of milk sourcing at the Sharpsville plant, in December, was already much different than the mix at the Swiss Premium plant in Lebanon. With Sharpsville close to the Ohio and New York borders, the plant has been sourcing milk from Ohio and New York for some time, but also increasingly from Michigan and Indiana.

In fact, at the December PMMB hearing, Kinser’s much-redacted testimony warned of Pennsylvania milk becoming displaced and that the new and lower 75-cent over-order premium level is “already a compromise that represented the highest level the current economic conditions can sustain.”

Kinser warned that if the premium were any higher than 75 cents, Dean Foods would be forced to renegotiate its contracts with suppliers to change the mix of milk used at ALL of its plants within the state in order to compete for contracts with packaged milk coming into the state from plants beyond Pennsylvania’s borders.

Even though the PMMB granted Dean’s request to lower the mandated premium to 75 cents, it appears the mix of milk is being renegotiated anyway as part of the company’s milk supply chain consolidation process as the volume adjustments at Pennsylvania plants have fallen primarily onto Pennsylvania farms.

Also emerging in the marketplace is the increased occurrence of brokered milk. This trend began in 2013 as producers across the Northeast and Mideast have dealt with contract losses in the fluid market at smaller levels than seen today.

Great Lakes Milk Producers is an example of a recently organized group of producers from Ohio, Michigan and Indiana, which is organized “like” a cooperative but markets milk as single-source loads through a broker.

Part of the drill is getting the milk qualified with farm audits and certifications as single-source loads that can be matched up to spot needs from cheese and yogurt plants to even, at times, the Dean plant in Sharpsville, Pennsylvania, the Southeast in the summer, and potentially even the new Class I Walmart plant in Fort Wayne.

Marketing through a broker can mean a long haul in a long market with changing conditions. This option makes milk quality a mandate without a premium.

As 27 farms in Indiana continue to seek a market, it is unclear whether brokering with Great Lakes Milk will become an option. The size of the displaced Indiana family dairy farms fits the single-source criteria, ranging 300 to 1500 cows and collectively represent an estimated 20 million pounds per month of displaced milk volume let go by a Dean plant in Indiana as well as Louisville, Kentucky.

“This is a huge issue for our state right now with an overwhelming impact,” said Indiana Dairy Producers executive director Doug Leman at a recent annual meeting in Indianapolis about the 27 farms with displaced milk scattered around the state. “Conversations are starting to happen, and we are planning a meeting for these farms. But just because Dean is not buying this milk, does not mean that the consumer demand has gone away. We have to let the dust settle and go through the milk shuffle.”

Among the recently affected Indiana farms is the sixth generation Kelsay Dairy Farm, operated by brothers Joe and Russ Kelsay and milking nearly 400 cows near Whiteland.  Joe Kelsay was the milkman for last year’s Indy500.

“We are exhausting all contacts and connections with cooperatives and plants,” said Kelsay in a phone interview. “Several told us they are not in a position to take any additional milk, some are doing some checking, and we do have a couple meetings scheduled. We are cautiously optimistic.”

When asked if the new Walmart plant will pick up any of the Dean dropped farms, Leman said the plant’s supply has been locked up with a percentage coming from undisclosed dairies doing contracts directly with Walmart and the balance being single-source loads via third parties.

“We can’t tell Walmart where to get the milk, but we are letting them know to check with these farms,” said Leman. “Some are within 50 miles of the plant.”

Kelsay doesn’t blame either Dean or Walmart for the market loss his family and others are experiencing. “This is a difficult time, but we can’t fault one company or another for doing their best to run their businesses,” he said.

Meanwhile, in Pennsylvania, town hall meetings were held (and reported in last week’s Farmshine) to raise public awareness. Ag Secretary Russ Redding wrote to Dean Foods asking for contract extensions.

But Dean has indicated its problem with excess volume will begin before these contracts end.

“We explored all our options before we made this decision,” noted Reace Smith, Dean Foods director of corporate communications. “At this time, we can’t extend the contracts further. As a fluid milk processing company, we are unable to store milk long-term.”

The timing is difficult with spring flush and spring decisions around the corner.

“We’re all in limbo right now,” said Agri-King nutritionist Bob Byers in a phone interview. He works with 25 farms, serving in the affected area of western Pennsylvania for 20 years. He notes that affected farm families have only so much time to make decisions like what crops to plant, what fuel and supplies to order. These decisions revolve around whether or not they will be milking cows after May 31.

“There is a timeline involved to unwind a multi-generational dairy farm with inventories of cows and feed and with a team of employees to think about,” says Kelsay. “If there is no one to purchase our milk, how can we continue? What happens here has a significant impact on our team of employees, and their families, as well as our hauler, nutritionist, equipment and feed suppliers – our whole web of contacts. We do a lot of business with a lot of people.”

Byers notes that this is the worst of times in the dairy business that he has seen in his 20 years and that it definitely affects local jobs and businesses.

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“Local people want local milk,” he said. “That is the only thing that will help these local farms at this point. Media attention will help get that message in front of consumers, and in front of companies like Walmart.”

CAPTIONS –

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Alisha Risser of Lebanon posted this photo of Harrisburg Dairies’ milk displaying the PA Preferred label signifying the milk was produced on Pennsylvania farms. The Rissers were part of a town hall meeting in Lebanon reported in last week’s Farmshine, and they are one of five farms whose contracts were dropped by the Dean Swiss Premium plant in Lebanon that will be picked up by Harrisburg Dairies.