(5) Comments and Testimony From Farmers
    In the language of economists, the Commission was told that a farm
can continue to operate in the short term only if market prices cover
variable costs. In the long term, it must cover the total cost of
production and marketing or the farm will cease operating.
    (WC 282 Pelsue) Farmers were more likely to describe this situation
as living off their depreciation or living off their equity, in terms
evidencing both frustration and humor.
    Connecticut dairy farmer, Mavis Collins, testified that:

    People in fact used to ask us ``what will you do with all the
money from selling your development rights'' and we jokingly would
reply, ``We'll farm until the money is all gone.'' And
unfortunately, that's almost what's happened. This year alone we had
to use $24,000 of our savings plus $11,000 from creditors in order
to keep up with current bills. * * * \44\

    \44\ Collins, 12/19/96 HT at 56.
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    Wendy Kennedy a farm wife and owner of a farm accounting and tax
service told the Commission:

    I pulled out the full time dairy farmers from my files. (25
files) The average income from their Schedule F which is where you
report farm income was a negative $5,263 for last year. (1995) * * *
With a negative bottom line of $5,263 these families are living off
their depreciation or selling off their assets to live * * * You
can't run a business like that and be in business next year.\45\

    \4\ Kennedy, 12/19/96 HT at 239-240.
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    Nowhere was the gap between cash receipts and costs of production
more apparent than when farmers talked about family living expenses or
any return for their family's labor: A Massachusetts dairy farmer
testified: ``My brother Edward and I milk about one hundred cows in
Westhampton, Mass. Ed and I take a draw of $300 per week and each of us
work about one hundred hours per week (6 a.m.-8 p.m. 7 days).\46\
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    \46\ Parsons, 1/2/97 WC at 236.
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    Jan d'Boer who milks 95 cows with his family told the Commission:
``We looked it over and we came up with about 35 hours of family labor
a day * * * And the wages per hour we came up with after we figured it
all out is $2.55 an hour.'' \47\
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    \47\ d'Boer, 12/17/96 at 192.
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    John Potter, a Washington, Connecticut dairy farmer: ``My costs
show $7.17 to produce milk, January through November. That's not
including anything for family living. That doesn't include anything for
depreciation or paying back debt.'' \48\
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    \48\ Porter, 12/19/96 HT at 226.

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    Joanne Reynolds, nurse and farm wife: ``In 1996, our milk price
averaged $14.88, but our expenses averaged $12.73. These expenses do
not reflect depreciation, debt principal or family living expense. What
other segment of society works 4000 hours a year, has a $500,000
investment and is basically living off of depreciation.'' \49\
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    \49\ Reynolds, 1/2/97 W/C at 293.
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    John Mordasky testified that: ``In the last four years, in order to
support my wife and myself we lived on our depreciation and my
legislative pay.'' \50\
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    \50\ Mordasky, 12/19/96 HT at 10.
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    John Devine of Devine farms of Massachusetts testified, `` * * * we
had the accountant pull off the facts from April to November and we had
a net loss of $12,877.23.'' \51\
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    \51\ Devine, 12/19/96 HT at 220.
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    Wayne Bissonette a dairy farmer from Hinesburg, Vermont told the
Commission that:

* * * long term decisions * * * [are] becoming increasingly
difficult as milk prices swing more dramatically with no apparent
link to other costs and market forces * * * ``I consider myself to
be a fairly efficient farmer,'' he said, ``and I believe that I
could make money with a blend price of $14.50. This does not allow
for much return on my equity but at this level I would be paying
income tax.''

    Alice Allen a dairy farmer from Wells River, Vermont said:

    In 1973, when my husband and I first began shipping milk, we
were receiving $7.50/cwt (federal Order 1) for milk. We were paying
$60 a ton for excellent quality 2nd cut hay and $80 a ton for 20%
protein. In 1996, we are receiving $15.37/cwt and paying $145 a ton
for second cut hay and $250 a ton for 20% protein concentrate.\52\

    \52\ Allen, 1/2/97 W/C at 3.
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    Scott Mason, a registered jersey farmer from Coos County testified
that:

    I'm looking at a break-even cost for my farm of $14.31. This
price does not include any figure for return to equity or family
labor. So 14.31 is I work 70 hours a week for nothing, my wife works
approximately 30 hours a week on the farm for nothing, and we risked
every last penny that we have for no return.\53\

    \53\ Mason, 12/7/96 HT at 87.
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    Leon Berthiaume the general manager of the St. Albans Cooperative
in St. Albans Vermont testified in summary with respect to the members
of his cooperative that:

* * the average size farm for the St. Albans Coop Creamery produces
1.6 million pounds of milk per year and through these statistics
[UVM and USDA] we know the net cost of production, not including
return on investment would be in the range of $13.50 to $14.25 per
hundredweight.\54\

    \54\ Berthiaume, 12/17 HT at 93 et seq.
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    The strength and consistency of the evidence in the record with
respect to the impact on farmers of their inability to cover their
costs of production provides stark evidence to the Commission of the
severity of the problems facing the region's dairy farmers, as well as
the consequences of inaction.