Higher operating costs hitting LI farmers in the pocketbook

David Wines guides the cows into the milking parlor at Ty Llywd Farm in Northville. His son Chris cleans the udders and then attaches the machine to the teats before the pumping begins. For 22 years, their working hands have kept the dairy business thriving.

But Ty Llywd Farm, like with many other farms on Long Island and across the country, has had to raise its prices because of inflation. Local farmers said higher costs for diesel fuel, fertilizer and animal feed are causing them to increase prices on food, dairy, fruits, vegetables and other products.

The raw milk Ty Llywd Farm sells in half-gallon glass bottles is up from $6.50 to $7, not including the $2.50 bottle deposit fee. Ty Llywd Farm on Friday also bumped up the price of a dozen eggs by 50 cents.

“It’s a taxing time,” said David Wines, who blames Russia's invasion of Ukraine for some of the global price disruptions. Those disruptions, along with other economic woes, recently caused the inflation rate in the U.S. to hit a four-decade high of 9.1%.

Overall, food prices in the metropolitan region climbed 9.1% for the 12-month period ending in June, according to the U.S. Bureau of Labor Statistics. This includes groceries and meals eaten out at restaurants.

Bill Zalakar, president of the Long Island Farm Bureau, an advocacy group that represents more than 550 farms, believes food prices will continue to remain high.

“The farmer can only get squeezed so much, and we don’t have much of a choice,” said Zalakar, who also is the manager of Kurt Weiss Greenhouses Inc. in Center Moriches.

"You will see higher food costs in the fall, not just local produce, but in major crops grown from wheat to barley to corn, and that is passed down to all the products," Zalakar said.

Many Island farmers selling directly to consumers, especially at farm stands, can adjust their prices, but those selling to distributors don’t have that level of control.

Todd Schmit, a professor at Cornell University who focuses on agricultural economics, said farmers are “price takers” rather than “price makers," and food prices are often dictated by markets, especially in commodity market channels. 

“It’s a difficult situation right now for farmers that are facing higher prices both in commodity inputs, as well as in financing, with limited ability to pass on those costs for buyers,” Schmit said.

Of top concern for Island growers is the surging cost of diesel fuel used to power tractors, irrigation pumps and other equipment. These prices also affect freight deliveries, with many truck drivers tacking on an additional fuel surcharge or refusing to trek out without a minimum threshold, several farmers said.

While diesel and regular gas prices are dropping, prices still remain high. Diesel fuel is averaging $5.43 a gallon nationally, up from $3.34 a year earlier, according to the U.S. Energy Department’s weekly survey. On Long Island, the average price of diesel gas was $5.77 a gallon on Friday, according to AAA Northeast.

Farmers are shelling out more money to operate their business. The price for key items used in agricultural production in May were up 17% compared to May of last year, according to the May index released by the U.S. Department of Agriculture. Among those items, the report shows that in May: Fertilizer prices shot up 77%; feed, including hay and grains, increased 15%; and pesticides went up 33%, compared to May 2021. Machinery was also up, 19% in May, per the report. 

Schmit said the report shows the margin between input and output prices is shrinking.

These inflationary pressures are magnified by rising wages amid labor shortages and supply-chain issues, agricultural experts said. Ukraine is one of the world’s largest exporters of wheat and corn, but since Russia invaded and blocked Black Sea ports, shipments have ceased, leading to skyrocketing costs of grain.

Tensions could ease, as a deal signed Friday between the two counties, Turkey and the United Nations, will allow ships to safely pass through the corridor. 

At Ty Llywd Farm, Chris Wines said he’s had to cut back on fertilizer for growing hay to feed his herd. He’s making do with manure instead.

The Wines' roughly 60-acre farm has been in the family since 1873 and is listed under the National Register of Historic Places. Chris Wines said he started the farm's dairy business in 2010.

Feeding the farm's 700 chickens has gone up, too. The family is paying roughly 25% more for grains, plus another 50% more for truck delivery, he said.

The inflation squeeze means they're often faced with difficult decisions.

“The fertilizer costs a lot more … we use diesel to irrigate the fields, and that sucks up a lot of fuel. We don’t know whether to irrigate or not,” David Wines said. In addition to hay, they also grow lettuce, sweet chard, beets and peppers. 

Farmer Brian Reeves, president of the New York State Vegetable Growers Association, said anyone running a business needs to be looking at where they can trim fat and save costs.

“It’s scary, but I’ve been doing this a while and am a big believer that when crisis comes, it also presents opportunities," said Reeves, co-owner of a Baldwinsville vegetable and fruit farm. "There are people who will value-add to their product … Then there are others who will scratch their heads and say 'I can’t keep up with this.' "

Walter Gaipa, who operates 21 greenhouses in East Marion, is thinking about trimming his operations because of heating costs to maintain greenhouses in the cooler months.

“The biggest thing we’re concerned about now is what it’s going to cost for heating fuel in the winter," said Gaipa, owner of Marion Gardens, Organic Herbs. "We’re predominantly natural gas, some propane, but we’re already making adjustments to open less greenhouses in the winter.

“We did raise our prices about 15%, but it probably wasn’t enough. We don’t think it’s affected sales, but eventually it’s going to,” he added.

At Wickham’s Fruit Farm in Cutchogue, Thomas Wickham is also taking modest measures to reduce oil costs at his greenhouses for next winter. One involves a system to heat the plant roots so that the ambient temperature can remain cooler, and another involves a forced air-heating mechanism.

Like other farmers, he won’t know what the bottom line will be until the end of the year. For now, he is buoyed by the retail store Wickham's operates, where there is a loyal customer base that understands recent price upticks, he said.

“I see this as some bump in the road but not a serious impediment to maintaining the kind of farming we’ve done,” said Wickham, who manages the 150-acre farm that’s been in the family since 1698.

“We may have to tighten our belts and abandon certain crops, but there is no question we will stay in business,” he added.

Nationally, the number of farms has continued to drop since 1935, according to the USDA’s most recent national survey. There were 2.01 million farms in 2021, down from 2.20 million in 2007. But the survey also shows the average farm size has grown slightly since the 1970s, from an average of 440 acres to an average of 445 acres.

In Suffolk County, there were 560 farms in 2017, 7% fewer than in 2012, according to the most recent USDA survey. There were 32 farms in Nassau in 2017, 42% fewer than in 2012. According to that 2017 survey, Island farms are also smaller in size.

While a new USDA survey won’t take place until later this year, Zalakar believes the pace of farmers exiting the industry in the region has slowed and points to a growing number of members in his organization.

“It's a struggle. We’ve been going through a battle losing farmland constantly as the price of land goes up," Zalakar said. "We have had to get more creative, but we have kind of stabilized. Here in the Farm Bureau, there is a younger generation actually coming back and getting into agriculture as land gets tighter and tighter."

Since taking over Catapano Dairy Farm in Peconic two years ago, first-time farmers Erin Argo Burke and husband Connor have been dealing with higher costs of supplies, including grain and hay for their 90 goats, and all kinds of plastic containers, plus transportation-related costs.

As a result, they’ve had to slightly increase the price of artisanal goat cheese sold from their store, but prices remain lower than they were pre-COVID-19. They produce goat milk, cheese, soap and other items on-site.

“We want people to know we are not trying to price-gouge or make them feel the sting of inflation any more than they have to do in their daily lives," Argo Burke said. "We are trying to make ends meet and make sure we are able to feed our herd while providing a quality product.

“We’re very grateful to our customers who buy locally," she added. "Otherwise, we wouldn’t be able to survive. … As a result, farmland would be developed and turned into something else."