What were you doing at 3:15 a.m. today? Dairy farmer Joe Hibschman of Syracuse, Ind., was waking up to milk his cows, just like he's been doing every day for the last 43 years.
But lately the work hasn't been as rewarding as it once was. That's because when the economy took a dive, the price of milk went with it. "A year ago we were getting 19 to 20 dollars (per 100 pounds) for our milk and today we're getting $12," says Hibschman.
Last year was the best year ever for dairying, Hibschman said. Droughts in New Zealand and Australia caused much of the world to turn to U.S. dairy farms for their milk, forcing prices upward. Now Hibschman estimates that he's losing $100 per cow per month. This translates into $20,000 a month he's been borrowing since January to keep his 200-head operation afloat.
"So far," he says, "the banker has been quite generous with us. We are decent managers and we have a good history with our lender." But Hibschman is concerned about how much longer he and other dairy farmers can hang on.
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Hibschman's grandfather purchased the 300-acre farm in the southeast corner of Elkhart County in 1942 and he took it over in 1966. He added a new milking operation 10 years ago. He also rents 200 acres of nearby farmland to raise feed for his cattle, but he has to buy other specialized ingredients, like cotton seed and vitamins, adding to his production costs.
"We have a significant debt load here yet from just building 10 years ago and I bought my brother and sister out a couple years ago. I'm still paying on the buildings and so I can't just quit. So I'm trying to hold out for the long term. I'm sure there's some of the older dairies that have been in existence for a while, certainly they will probably fold up because their investment is not as much and they can absorb that."
Hibschman said he'd really like to keep the farm in the family. "I hope dairy industry would recover to the place where my son would like to keep this tradition going," he said. "The grandsons enjoy being here and I certainly hope we can keep the farm and keep it for them."