Dairy farmers throughout the country have witnessed a dramatic roller coaster ride of milk prices over the last few years through the federal dairy price support program, and recently some local farmers are finding the only way to make a living is to set their own prices.

In just three years, milk prices have hit a high of $21.80 per 100 pounds of milk in 2007, and a record low of $11.30 in 2009. Those severe fluctuations have been common over the past two decades, but what hasn’t changed much is what it costs for farmers to produce that milk. New England farmers need to make about $17 per 100 pounds to cover production costs, and recently most haven’t been breaking even, according to John Porter, UNH cooperative extension agriculture professor and dairy specialist.

“Milk prices have been depressed due to an excess amount of milk being produced throughout the country,” Porter said on Friday. “A lot of farmers are literally losing money per month. It’s been really desperate. Now, the prices have increased a little bit, but they’re really not getting what they should be paid to make a living.”

Like most commodities, the price of milk is subject to supply and demand. Unlike many other commodities, however, dairy farmers always have a place to sell their product, regardless of demand. Under the dairy price support program, which was implemented in 1949 and designed to help farmers, the USDA buys excess milk in the form of powdered milk and cheese. These government-owned dairy products are stored in warehouses until they are resold to the commercial market or donated.

Under this program, which the USDA admits is flawed, milk producers have little incentive to limit production, Porter said.

“The price of milk goes down because there’s too much supply. But then farmers — who are looking to make up for the loss — need to earn more income so they produce even more milk and the price goes down further. It’s a terrible cycle,” Porter said.

In some extreme cases milk prices only rebound when desperate farmers slaughter dairy cattle for beef or go out of business.

Like many other family farms, Connolly Brothers Dairy Farm has struggled for years to break even. The Connolly family has been milking cows at the Temple farm since 1982, but in 2003, Chris, Mike and Pat Connolly had seen enough of the milk price roller coaster.

“Our family decided we were getting tired of the same old problems with the milk pricing,” Chris Connolly said. “We decided, if we were going to stay in this business then we would have to change something. The way we chose to do that is to cut the middleman out and sell directly to the consumer. Now we can adjust the price based on what it cost us to produce it, because we’re not controlled by the government.”

The Connollys now sell milk, ice cream and beef right from a small store attached to the dairy barn. They can only reach local customers, but they’ve been able to sell half of the 175 gallons they produce each day right from the store. They still sell the other half to a national wholesaler.

“We’ve been doing much better. Ideally we’d be able to sell 100 percent of what we produce right from the store. Obviously there’s a lot more work for us now, because we have to market the products, bottle the milk and make the ice cream, instead of just milking the cows,” Connolly said.

Connolly considers himself lucky, he said, because the farm has access to consumers who are willing to pay a little more for a local product and in turn help a local business.

“New England has been a great place to sell milk, with all the farmers markets and the buy-local movement. We have the people who are looking for those fresh local products,” Connolly said. “When you get out into the really rural areas, and out west, you don’t have the people around who can buy the milk, so you’re forced to sell it to a dairy industry. They don’t have the opportunities we have here, but then again, their production costs aren’t as high.”

Earlier this month Sen. Bernie Sanders of Vermont introduced the Dairy Market Stabilization Act with the hope that more small farms would be able to remain open. If passed, the act would fine dairy farmers who significantly increase production, thereby creating an incentive to limit production in times of lowered demand. Those fines would go into a pool that could be used to help farmers who suffer from depressed milk prices.

Connolly said he thinks the Dairy Market Stabilization Act could actually help struggling farmers, but was pessimistic that it would become law.

“It would be a good start if it takes into account what it costs for us to produce the product. We can only survive so many fluctuations in the market,” Connolly said. “But we don’t have a lot of lobbyists in Washington. Small dairy farmers are not well organized.”