FREDERICK, Md. (AP) — In a June 2 story about economic development in rural counties, Capital News Service reported erroneously that there are approximately 400 dairy farms in Frederick County. There are about 88 dairy farms in the county.
A corrected version of the story is below:
In north Maryland, economic trick in blending old with new
In north Maryland, economic trick in blending old with new
By J.F. MEILS and SEBASTIAN OBANDO
Capital News Service
FREDERICK, Md. (AP) — Before he got involved in the beer business, Frederick County farmer Greg Clabaugh grossed about $600 an acre for growing traditional crops such as corn and soybeans.
Now, on the land where he grows barley and rye, he grosses $6,000 an acre.
Included in that number is payment for malting, a process where grains are partially germinated, then heat-dried, allowing them to be more easily consumed by yeast in the brewing or distilling process.
"You gotta put the time in," said Clabaugh, about learning to malt. "We started at the bottom and worked our way up. Now, I have requests from all over."
Clabaugh's partner in his malting operation is Tom Flores, brewmaster for Monacacy Brewing and Brewer's Alley, both located in the city of Frederick. Clabaugh and Flores are the very portrait of what counties like Frederick are trying to do economically — find synergies between traditional agricultural interests and newer down-county businesses, including technology, tourism and a booming food and booze scene in the city of Frederick.
Unlike western Maryland and Eastern Shore counties, which are starved for growth, Carroll, Frederick and Harford are trying to ensure their farming heritage doesn't become a casualty of their recent economic success and decades-long population growth. A legacy industry in particular jeopardy is dairy farming, which is suffering acutely from a steep drop in the market price for raw milk.
Can Maryland's northern counties thread the needle between the older and newer parts of their economies? It's not clear. But if they're successful, they could show other rural areas how to lean less on farming without forsaking it altogether.
THE GIFT OF GEOGRAPHY IS NOT A GIFT FOR ALL
From 1960 to 2010, the counties of Carroll, Frederick and Harford each experienced more than 200 percent population growth, most of it down-county, in commuting distance to either Washington, D.C.; Baltimore or both. The demographic explosion was the result of a range of factors, from the construction of Interstate 270 to Frederick in the 1970s to the steady bedrooming of Carroll and Harford by commuters looking for cheaper real estate and a better quality of life.
"We're on the precipice of being a full-fledged suburban county," said Harford County Executive Barry Glassman, a Republican. "We're down to four or five dairy farms."
The effects of the demographic shift over the past few decades hit traditional farming businesses hard, both in land swallowed for real estate development and increases in agricultural production costs. Between 1997 and 2012, Harford lost 30 percent of its farmland. In Frederick, the decrease was 15 percent in the same span.
"We can't compete with a developer selling $500,000 homes because they can spend a lot more on land," said Colby Ferguson, director of government relations from the Maryland Farm Bureau.
Where farms disappeared, commuters filled in, bringing their urban paychecks to fast-developing rural areas. The city of Frederick, now the second-largest in Maryland at about 70,000 people, was a big economic driver and diversifier.
The counties of Frederick and Harford also benefit from an enviable bit of stable government largesse — their biggest single employers are both military. Aberdeen Proving Grounds in Harford employs 21,000 and Fort Detrick in Frederick is responsible for 6,400 jobs, according the Maryland Department of Commerce.
Beyond direct employment, the ancillary economic benefits of the bases are enormous.
Fort Detrick is home to a range of research labs, military medical operations and biodefense efforts. A small cottage industry of private biomedical support firms and services has grown in the area as a result.
Though not directly related, a tech community has also been steadily expanding in Frederick, led by companies like Yakabod and Swift Systems that focus on information technology and networking solutions for government and private clients.
However, like Fort Detrick and Aberdeen Proving Grounds, the tech sector in Frederick is located in the county's southern end, reinforcing the economic divide and maintaining pressure on dwindling agricultural lands to the north.
"With more people coming to Frederick County, it makes our land prices go up," said Katie Albaugh, agriculture business development specialist for Frederick County. "So farmers, with the low grain prices, need to farm more ground to make a living, but they can't afford to buy the land because the price has gone up."
The challenge might be preventing one area from swallowing the other.
"I think that the two can co-exist," said Frederick County Executive Jan Gardner, a Democrat. "But we really need to focus our growth around urban areas."
In Frederick, anyway, political forces seem to be aligned in this regard.
"We're trying to keep our development south of I-70," said Frederick County Councilman Bud Otis, a Republican. "If something is going to jump that line, it's going to have to be something pretty special."
One thing that might protect northern agricultural lands is the sheer cost of infrastructure needed to support down-county development.
While new residential and commercial properties eat up capital improvement budget dollars for water and sewer expansion as well as for transportation and school projects, they tend keep developers eyes to the south, where it's easier to build.
THE END OF DAIRY IN MARYLAND?
Frederick was once one of the largest milk-producing counties in the country. Soon, it could be one of the smallest.
According to Maryland Dairy Industry Oversight and Advisory Council, there are about 88 dairy farms in Frederick, down 50 percent in the past 15 years.
"Family dairy farming in Maryland is done," said Clabaugh. "Nowadays, you need to have a couple hundred cows" just to be profitable, a reality that is driving some smaller farms out of business.
The decline of the dairy business in Frederick reflects a brutal economic climate that combines depressed milk prices with rising operating expenses — a mix that has eroded profits and pushed more farmers into financial turmoil.
"It's a miracle anyone's milking cows because you don't know what (price) you're getting from moment to moment," said Jimmy Stup, whose dairy farm in Walkersville includes more than 1,000 milk cows.
Milk prices received by Maryland farmers reached a high of $26 per 100 pounds in the spring of 2014 then began a rapid decent, hitting a low of $15.30 per 100 pounds in May 2016, according to Maryland Dairy Industry Oversight and Advisory Council. Prices have risen somewhat and are now above $17 per 100 pounds.
"Maryland has lost a number of dairy farms largely due to these low milk prices," said Laurie Savage, spokeswoman of the Maryland Dairy Industry Association.
But it's not just price that's driving dairy farmers out of business.
"Primarily, there is just too much milk and not enough demand," said Mark Powell, chief of marketing at the Maryland Department of Agriculture. "In the United States, fluid milk consumption continues to go down."
Global politics have also played a role. After Russia banned European Union dairy products in August 2014, a glut of milk flooded the continent, reducing U.S. dairy exports and driving down prices worldwide.
While these developments have hit dairy operations across the country, economists say Maryland farmers are at a greater disadvantage because other costs, like land and labor, which are more expensive because of the state's proximity to large population centers in Washington, D.C., and Baltimore, which are encroaching on rural areas.
Data from the U.S. Dept. of Agriculture show that the cost of running a farm in Maryland is higher than in most other Mid-Atlantic states, although costs are lower than average in Frederick. Average farm production expenditures in 2012 were $158,300 in Maryland compared to $127,600 in New York and $101,900 in Pennsylvania.
The high cost of farming in Maryland may explain why big farms are buying up smaller ones: because they're better able to withstand the bad times.
"While the (number of) dairy farms may be getting smaller, the number of milk cows might be staying the same because the remaining dairy farms are larger," said Jim Hanson, a professor in the Agricultural and Resource Economics department at the University of Maryland.
The total amount of annual milk production in Maryland has fallen over the past three decades, but has remained relatively stable in the past six years at more than 900 million pounds, even though gross income has dropped sharply.
"We're not getting rich," said Myersville farmer Joe Mangiafico. "We're making enough to keep going. I'm not saying it's not a struggle."
CAN BEER, TECH AND TOURISM SAVE AG?
The partnership between Greg Clabaugh and Tom Flores happened because Clabaugh picked up the spent grain Flores used for brewing to feed to his dairy cows.
One day, they got to talking.
"I asked him: 'Can you grow barley?'" recalled Flores. "(Clabaugh) said: 'If there's anything I can grow, it's barley,' and we just sort of went from there."
The result was Amber Fields Malting and Brewing, a company that Flores believes can be emulated successfully in Maryland.
"A lot of Maryland farmers know how to cultivate land for small grains," said Flores, who is almost exclusively malting rye with Clabaugh at the moment, for Monacacy's Riot Rye Pale Ale.
Prices for malted grains run anywhere between about 40 cents to $1 a pound, according to Flores. And it takes a lot of malt to make beer, about 350 pounds to make 14 kegs of a lighter beer and upwards of 450 pounds for 14 kegs of an IPA-style brew.
As expected, Flores is a big proponent of keeping his ingredients as local as possible. Despite producing one of the first beers in almost a century to be made 100 percent from ingredients produced in Frederick, he is no zealot.
"Local for the sake of local alone is not a good enough reason to pursue it. You need to start with high quality," he said.
For Monica Pearce, who opened Tenth Ward Distilling with Kyle Pfalzer in 2016, the benefits of local are two-fold. "It's really important to me to limit the impact we have on the environment," she said. "The other side is having your products influenced by local flavor."
A third benefit might be attracting tourists.
According to Helen Propheter, Frederick County's head of economic development, the county earned the equivalent of $1 million a day in tourist revenue starting in 2014.
A big part of that draw is the city of Frederick, its restaurants and, yes, its breweries and distilleries, which the county now promotes with a dedicated tour map.
"People are starting to ask where their whiskey comes from," said Pearce. "They wouldn't have done that 10 years ago."
Frederick's food, drink and historic vibe have combined to create something intangible but crucial for the entire county: a scene. And getting in on that scene is agriculture, which is drawing tourists who come to the city of Frederick up county for its orchards, produce markets and creameries.
Even Frederick's tech community stands to benefit, if they can just get the word out.
"(Newcomers to Frederick) want to live here for quality of life and affordable housing," said Vaughn Thurman, founder of Swift Software and Swift Systems, which is located in Frederick and does IT support and workflow software. "But they don't realize they should live here in order to work here."
Scott Ryser, CEO of Yakabod, a collaborative software company that is one of Frederick's first tech denizens, said he wants to put a billboard on I-270 south that tells people they're driving in the wrong direction.
"I walk to work," said Ryser. "I don't know why I didn't do this 20 years ago."