NEDPA joined forces with the Northeast Agribusiness & Feed Alliance (NEAFA) to host the Dairy & Transportation Summit February 7 in Albany, NY. This summit was a follow up to the November 2021 Dairy Roundtable NEDPA hosted to identify the challenges and opportunities impacting the long term viability of the dairy industry in New York State. Milk hauling surfaced as critical issue, specifically driver shortages, maintenance costs, and plant delays, all of which have intensified since COVID.
NEAFA is a logical partner to further explore the transportation challenges for two primary reasons. First of all, NEAFA members are businesses that depend heavily on dairy farm customers for their survival. Secondly, transportation is also a critical issue for businesses sourcing and delivering feed, commodities and supplies to dairy farms. Panelists were invited to explore this perspective as well, citing many of the same challenges milk haulers face.
Dairy Farmer Perspective
Moderated by Tom Overton PRO-DAIRY, a panel of dairy farmers and Upstate-Niagara Cooperative Economist and Policy Analyst Jodi Smith- Krzysiak launched the summit to provide an overview of challenges and concerns ahead. Jodi Smith- Krzysiak began with an update on milk marketing. After the banner year of 2022, 2023 will fall short due to lower milk prices, higher input costs and inflation. She pointed out that inflation will cut from the consumer side as well. The price of dairy products are up approximately 15 percent from last year and these increases along with cost of other food is impacting what consumers are buying. The dairy industry’s reliance on export sales is another concern. Currently, one day’s national milk production per week needs to find a home overseas. The need for a better system for crisis management relief is imminent, especially in the face of more frequent extreme weather events. She also identified New York’s lofty net zero goals as a concern for both farmers and processors, beginning with limiting access to natural gas and also the prospect of packaging recycling responsibility.
NEDPA producer members Keith Kimball, Kendra Lamb, Stuart Ziehm and AJ Wormuth shared personal perspective on the challenges they see ahead for their dairies. The cost and availability of labor (including the state’s increasing minimum wage and overtime regulation), inflationary increase in input costs, growth limitations, and uncertainty of the impact of initiatives to meet CLCPA goals. All of these challenges with the reality of being price-takers and the inability to add cows.
“The model broke,” stated AJ Wormuth, “We used to be able to get bigger to cover increasing costs. Then base restrictions and quotas limited growth, forcing consolidation to gain market share. What is the new model? We have more costs, more regulation, no ability to price our product and we can’t grow our way out of it.”
Transportation Challenges
“Challenges in milk transportation are not new,” began Farm Credit East’s Chris Laughton introducing a white paper he prepared on Challenges in Northeast Milk Transportation. He quoted a 1943 report identifying “a lack of drivers
and related personnel, low volume routes, and insufficient compensation for transporters as major challenges 80 years ago as well.
“The average age driver in the American fleet is 57, as compared to 42 in other sectors,” began Michael Howlett, moderator of a panel to address driver availability, training and licensing. His Howlett Farms operation includes a fleet of trucks for grain and commodity transportation. “Our drivers want three things: predictable work, predictable pay and predictable home time.”
“First of all, as a society, we need to respect and value blue collar careers,” began Chris Laughton identifying a solution path. “We need to identify and remove barriers to entry to those careers and we need to effectively market ourselves. We need to spend as much effort marketing to potential employees as we do marketing our products to consumers.”
Attracting/introducing young people to truck driving as a vocation at an early age was one solution identified by several on the panel. Robert Faley, Vermont Agency of Transportation, shared they’ve started an internship program for 16-year-olds. Kendra Hems, president of the Trucking Association of New York suggested the need to communicate the opportunity as a respected career to parents and students at a young age. There were suggestions to reach out to charter schools and be part of career exploration events. Commissioner Ball highlighted Ag Career Days at State Fair as an opportunity to plant seeds for future drivers. Chris White, NY DOL Deputy Commissioner of Workforce Development, suggested contacting your local BOCES to offer a program and talk to community colleges, which are hungry to be relevant in communities. New York has made it possible for 18-year-olds to begin CDL training, but additional training is required, insurance costs may be restrictive and they would not be qualified to drive in other states.
Hems and White both identified grant and funding sources to help cover CDL training costs. Simulator training is also an option and NYS DOL is launching these training opportunities in corrections facilities.
As a marketing suggestion, White suggested asking an employee or driver who has been with you a number of years,
“Hey, why are you here? Why do you do this?” Then use his/her answers as your talking points to recruit prospects. He also warns not to take current employees for granted -- ask what you could do better.
Hems pointed out that culture is important. Drivers want to know who they work for and what they stand for. Agriculture has a great message,” she pointed out.
Raw Milk Hauling Bottlenecks/Solutions
In an industry that operates 24/7 producing a perishable product, with no possibility to shut down production at the source (the farms), any disruption from farm to processing plant delays can cause a bottle necks. A panel discussing these challenges and possible solutions was moderated by Tonya Van Slyke. Panelists Eric Ericksen, who shut down his Greene Trucking milk hauling business last spring, Keith Kimball, who hauls his own milk, Barney McConnell, DFA Senior Director of Transportation, and Mike Davis, Upstate-Niagara Coop General Manager, Membership & Bulk Sales Division identified the following challenges:
■ Delays/ reduced hours/ slow turnaround time at plants – causing long waits, disruption of routes, driver frustration and resignations. Solution: investment in infrastructure/storage, unloading efficiencies, expanded hours
■ Pick up efficiency at farms. Solution: more storage, high-speed pumps, better/faster cooling capacity, improved accessibility of tank
■ State road closures due to weather events. Solution: provide exemption options for milk trucks/processing plant workers
■ Varying weight restrictions on roads and bridges/ different highway weight restrictions state to state. Solution: investment in NYS roads and bridges/ work with other states to update regulations
Panelist Laura Ginsburg, who leads the federally-funded Northeast Dairy Business Innovation Center, hosted by the Vermont Agency of Agriculture, encouraged producers and processors to contact The Center for grant funding available for many of the capital project solutions identified to improve supply chain logistics, both on farm and at processing plants. (email: laura.ginsburg@vermont.gov/ phone 802-522-2252)
Panelist Deputy Commissioner of Agriculture Jennifer Trodden stressed Ag and Markets commitment to the dairy industry. She explained that the Dairy Think Tank has challenged the Department to focus on workforce development and processing expansion. The Department is taking an interagency approach to meeting the goals of these priority areas.
Feed Commodity Bottlenecks
Andy Dugan of Gold Star Feed & Grain moderated a panel to discuss the bottlenecks existing in feed transportation. Panelists Blake Lutz, Lutz Feed, Kevin Kouri, Phoenix Feed & Nutrition, Greg McCulloch, Feed Ingredient Trading Co. echoed the challenges voiced in previous panels, adding a 25% increase in the cost of new trucks and maintenance to the list. Consolidation of farms has stretched delivery distances. In some cases, smaller customers have been dropped to improve efficiencies.
Panelist Jim Walsh of Manatt, Phelps & Phillips, LLP addressed New York’s proposed aggressive transition to EV trucks. The industry is lobbying to slow it down, as there are currently no EV heavy trucks on the market that can travel the distances required. There is currently not one EV truck recharging unit in New York State. The weight and mileage limitations of current battery technology would require 30 to 50 percent more trucks to meet current demands.
“Overall the mandate the state has taken on sets a very high bar. It is up to us to make the point of how it will impact the average consumer,” Walsh explained. “We have raised all the technical obstacles, but those have fallen on deaf ears.”