Kane dairy farmers face uncertain future

Times are tough for dairy farmers in Kane County, as milk prices are uncertain amid the COVID-19 outbreak.

“The market is bad,” said Michael Kenyon, a dairy farmer and Kane County Board member from South Elgin. “The price of commodities is down. Fuel is down. Everything in the whole world is upside down.”

The milk from Kenyon Bros. Co., Dairy Cattle goes to Wisconsin as part of a co-op.

The company that was transporting the co-op's milk quit last month and the new company raised its rates, Kenyon said.

“The old company charged 90 cents for every hundred pounds of milk. The new people want $2,” Kenyon said. “I told them I can just do this for a while. … We cannot take that big a hit too long.”

Kenyon’s saving grace is that his milk still goes to Elgin District U-46 for children who get their primary nutrition through the schools and to the Salvation Army for the people they assisy.

One thing he’s noticed during the stay-at-home order is more people are out walking – and they stop by to look at his cows.

“They love the attention,” Kenyon said. “They’re very curious – both the people and the cows.

Milk futures down 30%

Sarah Lenkaitis, who along with her husband, runs Lenkaitis Registered Holsteins in Campton Hills, had reinvested in the business, creating a state-of-the-art milking barn.

“We needed to reinvest to make it sustainable for our son and nieces and nephews, so we took the plunge two years ago,” Lenkaitis said. “Dairy has been a challenging economy for the last couple of years.”

Lenkaitis said they were just seeing a positive turn for farmers in 2019 and were looking forward to 2020 as their economic recovery year.

That is, until the coronavirus pandemic.

“None of us knew this coronavirus would come along,” she said. “I was reading some other news stories related to it. An Alabama farmer said it felt like you were just starting to pick yourself up off the ground and now it feels like a kick in the teeth.”

To put it in perspective, milk futures – that is, the projection of what milk prices would be down the road – are down about 30%, she said.

“If 30% is true, the answer will be different for every farmer you talk to. It will depend on where they are, what their business looks like, what their current and future goals are,” Lenkaitis said. “Every one will handle it a little bit differently. … Some might retire. That is not the situation my husband and I are in. … We are trying to make some really smart business decisions to figure out how our family will weather this storm.”

Dairy industry tries to pivot

One way for farmers to reduce milk production is to give cows a longer period of dry months – that is, after they’ve calved and have been milked for nine months, they get three months off before the next calf, she said.

“Instead of a two- or three-month dry period, maybe a longer than that, and maybe only milk them for seven or eight months,” she said.

And it may come to sending milk cows to slaughter.

“It might be a cow that does not produce a lot of milk or has trouble getting bred,” Lenkaitis said. “It makes you think a little harder about those cows.”

But the dairy industry itself is also trying to pivot, Lenkaitis said.

“You go to the grocery store and some of the dairy sections are not very well-stocked right now. You don’t see the same supply of different cheeses and bags of shredded cheese,” Lenkaitis said. “That is a result of the dairy industry trying to pivot from food processing more toward retail.”

For example, a big food service user would get a 40-pound block of cheese – something no grocery consumer is going to do.

So the industry is changing its processing to direct it more towards retail than industry – because so much is closed due to the virus.

“The processors are trying to figure out how to get more product to retail, and working with food banks,” Lenkaitis said. “A lot of people are working really hard for how we weather this storm.”

Looking forward to tours, open house

Lenkaitis milk is picked up every other day by a truck that is part of the Dairy Farmers of America co-op. The truck takes it to a Dean’s plant in Rockford that mainly makes cottage cheese, she said.

Because Dean’s filed for bankruptcy, it’s in the final stages of a deal where the co-op will be buying most of the company’s plants, including the one in Rockford, she said.

Other than worrying about milk prices futures, the Lenkaitis dairy used to host tours and a open house to show the public their cows and technology.

“We had an open house with more than a thousand people coming. There was a great deal of interest in dairy farms,” Lenkaitis said. “Once this all settles down, we are looking forward to doing that again.”

Despite the economic risks of being a dairy farmer, Lenkaitis said it is considered a essential business in the midst of the state’s shutdown.

“We do our best to carry on as normal with social distancing in mind,” Lenkaitis said. “What is unique to our industry is we milk the cows every day and they produce a perishable product that is milk. We have to continue on. We can’t decide not to milk the cows tomorrow.”