Libby Bleakney rises at 2 every morning to start milking a barn full of Jersey cows by 3 a.m.

The milking at Highland Farms in Cornish takes about four hours and is followed by breakfast, then office work — or, depending on the season, haying.

The afternoon milking starts by 2 p.m. and goes until about 6. Bleakney tries to be in bed by 9 p.m. so she can get some sleep before rising at 2 and doing it all over again.

“It’s got to be done,” said the fifth-generation dairy farmer. “Twice a day, seven days a week. Holidays and snowstorms.”

Despite all this hard work, the dairy operation on the farm is losing money. And that’s the norm rather than the exception for the state’s dairy farms.

Maine dairy farms have always struggled to make ends meet — even with the help of federal and state safety nets — but big spikes in fuel and grain costs last year hit them hard. Now many of them are teetering on the edge of going under.

Maine has 307 dairy farms, down from about 500 in 2000, and every one of them is family-owned. That’s a fraction of the number of dairy farms operating in the state 50 years ago, and the number is decreasing with each passing year.

There are numerous reasons for the decline, some as simple as the fact that as farmers have aged, there are fewer younger farmers willing to replace them. Farms have either gone out of business altogether or shifted their focus to something other than a dairy operation.

Maine farms also have inherently higher costs in some areas. Feed for the cows, usually a farm’s largest expense, must be purchased and shipped to Maine from other parts of the country. As booms and busts in dairy pricing become more extreme, these costs take a greater toll on a farm’s bottom line.

But mostly, farmers blame a federal price support system that favors the larger, industrial-style farms in the Midwest and West over the nation’s smaller dairy farms.

“If I had to guess, I would say probably about a third of our farms are going day to day (financially),” said Julie-Marie Bickford, executive director of the Maine Dairy Industry Association. “If there’s a big crash in the price that farmers get paid for their milk, or feed starts to creep back up, it’s pretty sketchy.”

Last year, the price of milk dropped, and dairy farmers absorbed the loss — as they are used to doing. Then came the drought, and grain prices went through the roof.

That was the final straw for Leary Farm’s dairy business in Saco.

In January 2012, Tim Leary paid $380 a ton for feed. Feed prices started going up in summer and peaked at more than $500 a ton, “to the point where it was frightening,” Leary said.

Leary has just made the decision to stop dairy farming before he gets into deep financial trouble. His family’s 500-acre farm, which at its height milked about 50 cows, is the last commercial dairy operation in Saco.

“I could keep going,” Leary said. “I could struggle along probably for several more years. But right now everything’s paid for, and I think this is a prudent time for us to pull the plug.”

Leary is converting part of the farm to a vegetable operation. His daughter, Alison, will keep a few cows to make value-added products like cheese and yogurt, and the family will keep a cow or two for their own needs, but Leary has begun gradually selling off his herd.

“Unless people want to pay $7 or $8 for a gallon of milk, this is the way it’s going to be,” Leary said. “The market is such that it keeps milk relatively affordable for consumers, but the dairy farm takes it in the neck.”

PRICE-SUPPORT PAYMENTS

The state’s dairy-relief program is designed to throw a financial lifeline to Maine’s dairy farmers when the market gets unstable.

When dairy farms are paid less for their milk than it costs to produce it, they get a check from the state that comes from a pool of money funded by Maine dairies. The amount of the check is based on the federal minimum milk price and other factors.

The price-support payments are triggered at a set amount, depending on the size of the farm. For example, Maine’s smallest farms are currently guaranteed $21 per 100 pounds of milk — or $21 per hundred weight, as they put it in the industry. (A hundred pounds equals 11.6 gallons.) When they’re paid less than that in the marketplace, it triggers a payment from the milk fund.

From 2007 to 2009, the state dairy safety net paid out $30 million to Maine dairy farmers, according to the last survey that looked at production costs. Historically, the program has helped save some farms: From 2004 to 2010, Maine lost 19 percent of its dairy farms, while Vermont and New Hampshire lost about half of theirs.

But now dairy farmers are faced with dramatically higher feed and fuel costs. That same small Maine farmer who is guaranteed $21 per 100 pounds of milk is finding that it now costs $30 per hundred pounds to produce it.

At that rate, farmers would need to get back a minimum of $2.38 a gallon from milk sold in Maine stores in order to break even, according to the Maine Dairy Industry Association. But in January, they were paid $1.91 per gallon. (Some farms could get more because of negotiated premiums and cost of production adjustments.)

For its part, the federal price-support program provides only “pennies” to Maine dairy farmers, said Tim Drake, executive director of the Maine Milk Commission. Most farmers view it as better than nothing, but it’s not enough to help them break even.

“When you’re losing $10 per hundred weight,” Drake said, “2 cents really doesn’t do much to help.”

Farmers took another hit earlier this winter when Garelick Farms, a Bangor-based dairy processor, closed down, leaving only two large dairies in the state to purchase their milk — Oakhurst and Hood. Garelick had been contributing about $50,000 a month to the state milk fund, so that money is lost; the other dairies do not have to make up the difference.

And if the milk Garelick Farms bought now starts going to processors outside of the state instead of a Maine dairy, that could mean losing even more money from the fund.

Bleakney said the checks from the state’s dairy-relief program have been a big help to her farm over the years. But now the price of Midwest corn has jumped from $5 to $6 per bushel up to $8 a bushel, “and we all know what the fuel prices have done.”

“It’s been very difficult the last few years with the price of fuel, the price we pay for our grain that we feed our animals because of the drought in the Midwest,” Bleakney said. “That had a huge, huge impact on our costs.”

Bleakney says those “input costs” should somehow be figured into what dairy farmers are paid to better reflect the marketplace.

Commercial dairy farmers have been working for years on a better milk price-support formula to pitch to the U.S. Department of Agriculture, Bickford said. But the agency has been reluctant to open a hearing on the matter as long as Congress is still discussing the farm bill, and large industrial milk producers are not pining for it.

U.S. Rep. Chellie Pingree, D-Maine, who has served on the House Agriculture Committee, said the farm bill “goes further and is better than what we’ve had in the past, but it doesn’t do a good enough job of reflecting increasing costs.”

“Between the drought and the impacts ethanol subsidies have had on the price of corn, it’s just gotten so unaffordable” for farmers, said Pingree, who is married to S. Donald Sussman, majority shareholder of the Portland Press Herald/Maine Sunday Telegram. “They need a better price-support system, some of which is in the farm bill if and when we ever get it passed — we will get it passed sometime.

“But (farmers are) stuck. They’re stuck waiting for the farm bill to pass, and I think they’re stuck a little bit because of the bad policy around ethanol.”

FARMERS JUGGLE FINANCES

Meanwhile, Maine dairy farmers continue to struggle. Feed companies have been as flexible as they can with farmers facing skyrocketing bills, Bickford said, “but they’re at the limit to where they can’t extend any more credit without jeopardizing their business.”

So farmers, who have to feed their cows, are juggling their finances in order to keep the grain bills up to date. Now the financial pressure is being pushed onto fuel companies, veterinarians, equipment dealers and other related businesses.

“Farmers are basically eating up their equity,” Bickford said. “There’s not a whole lot left to live on.”

If dairy farming is so hard, and there’s so little financial return, why do people stick with it?

“When you’ve got farms that date back to the 1700s and you have generations of farmers who have been working that land, that’s pretty tough,” Bickford said. “You don’t want to be the generation that couldn’t make a go of it.”

The barn on the Leary Farm in Saco was built in the 1850s, and there has been a commercial dairy operation on the property for 66 years — ever since Tim Leary’s father, Jim, graduated from high school in 1947. Oakhurst has bought the farm’s milk for 32 years.

Jim Leary, 83, devoted his entire life to the dairy, and his son admits that weighed on his mind when he was making the decision to shut down. Some members of the family were not happy about it — until he showed them the numbers.

“It’s not an easy thing,” he said, “but at some point, you’ve got to do the math.”

When Tim Leary was growing up, his mother never needed to work off the farm. She took care of the house and children, while Jim took care of the farm and paid the bills.

“My mother never milked a cow and my father never changed a diaper, so they had a nice little division of labor,” Leary said. “But now I think there isn’t a single dairy operation in southern Maine where you don’t have either a gravel pit, a woodlot or a spouse that works outside the home to support the farm operation.”

Like the Leary Farm, Highland Farms in Cornish also has deep roots in the dairy business. Founded in 1886, it’s always been a commercial dairy operation.

The farm sits atop a hill high above the town of Cornish, with stunning views of the mountains, even in winter. Bleakney’s grandfather purchased surrounding farms as they went out of business, and over the years the family’s property has grown to 1,200 acres.

Today, the farm is owned by the fifth generation of the family — David and Lorie Pike, Libby Bleakney and her brother, Daniel Palmer, with whom she manages the dairy operation. All of the farm’s milk goes to Oakhurst.

About 20 years ago, the Cornish farm started a logging business to help supplement its income. Five or six years ago, the farm also started selling compost wholesale to nursery and garden centers.

Libby Bleakney can’t imagine not being a dairy farmer. Sometimes it’s Bleakney’s cousin or children who do the day’s milking — they swap out shifts with each other so they all get a break — but it’s always a member of this fifth-generation farm family tending their 260 cows.

But for Bleakney, keeping the farm running is about more than preserving the family legacy. Dairy farming is something that gets in your blood after years of rising before dawn and long nights easing a new calf’s way into the world.

“You have to enjoy and make farming your hobby,” Bleakney said. “You don’t want to get up and work 65 hours a week-plus and not enjoy it because it would be a miserable life.”

The family always works holidays, and when Bleakney and her husband go on vacation, they invariably wind up visiting other dairy farms to meet other farmers and keep up with new ideas and technology. Bleakney’s husband likes to joke that “there’s always a cow at the other end of our vacation.”

GIVING UP A WAY OF LIFE

Tim Leary is a little wary of how he’ll respond to the changes that are coming his way. Giving up one 9-to-5 job for another one is just a job shift, he notes, but giving up dairying means he’ll have to learn how to let go of an entire way of life.

“Those cows have to be milked twice a day every single day, and it consumes you,” he said. “And so when you decide to step away from it, it’s a dramatic shift. It’s not a minor thing; it’s a gigantic change in your whole lifestyle.”

Leary is, in a way, comforted by the hard facts he finds in his financial records. He doesn’t see a huge shift in the fortunes of dairy farmers coming anytime soon.

And that makes the letting go a little easier.

“For me, I’m not such an old man that I’m so set in my ways and can’t make a change,” he said. “And this is a parallel track. We’ll still be working off the land. I won’t be building houses across the road from the house, I’ll be able to look out and see a beautiful field. But instead of having hay growing out there, I’ll have some kind of vegetables growing out there instead.”

For the Learys, the long, slow slide has come to a gentle end.

When Jim Leary started shipping milk back in the 1940s, there were 50 dairy farms in Saco. Some of them were very small, but there were 50. By the time his son Tim graduated from college with a degree in animal science in 1981, there were just 12 to 15 dairy farms in the community. Now the Leary Farm is the only one left.

The farm’s margin was thin before the price of grain soared last year. This year, it disappeared.

Leary says he can no longer afford to replace or upgrade anything on the farm. The decision to shut down has been tough, he said, but he is at peace with it. He has begun gradually selling off his cows, but will probably milk through the winter to keep himself busy.

“I don’t have an end date,” Leary said. “I don’t know when it will come to an end.

“But it will. It will.”

Meredith Goad can be contacted at 791-6332 or at:

[email protected]