🔒Is ‘agri-energy’ an answer for Maine’s dairy industry?

Summit Utilities, a natural gas provider in Colorado, has partnered with Flood Brothers and other central Maine dairy farms to produce biogas, which can be converted to electricity or a heat source for cooking and other tasks.

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How does milk pricing work?

Prices paid to dairy farmers are outside their control. Pricing is based on complicated formulas related to commodity markets and manufacturing processes, and vary according to class of goods. For example, milk going to a bottling plant is Class I, a perishable product that receives a higher price; milk processed for cheese is Class III, a longer-lasting product receiving a lower price.

To prevent farmers from sending all their milk to plants for the higher Class I price, all milk within certain regions is “pooled” and each farmer receives an averaged price.

So farmers in a dominant Class I milk area, like Maine, are paid less that the Class I value. But farmers in a dominant Class III cheese area, like Vermont, are paid at a higher rate than the Class III value.

Plus, prices vary wildly in any given time period.

Farmers’ ability to keep the books balanced is further complicated because they don’t know what they’ll be paid until weeks after the milk has been shipped. By then, farmers have moved on to the next batch. So when prices fall, farmers are often caught out, scrambling to cover farm costs.

The state of Maine designed a stabilization program to insulate farmers from low prices. But since 2012, prices haven’t kept pace with costs like feed and fuel.

– Digital Partners -