Farm Bureau urges fix for dairy crisis

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March 21, 2009

Anonymous The Press Republican Fri May 14, 2010, 07:16 PM EDT

ALBANY— New York Farm Bureau president Dean Norton is urging the state's congressional delegation to help bring immediate crisis relief to dairy farmers, who are suffering through one of the most dramatic milk-price drops in state history. Farm Bureau is recommending six immediate solutions that could ease the pricing crisis.

"These recommendations provide a short and long-term strategy for practical and meaningful economic solutions to the immediate and long-term challenges facing New York's dairy community," Norton said in a letter to the delegation recently.

"There is little doubt that dairy farms will not be able to sustain their businesses in this fiscal climate unless decisive action is taken," Norton said.

Farm Bureau also sent a letter to Agriculture Secretary Tom Vilsack and has talked extensively with State Agriculture Commissioner Patrick Hooker about solutions to the crisis.

Dairy producers are struggling to meet their financial commitments because of historically low milk prices coupled with erratically high energy, feed and fertilizer costs. The dairy industry is the largest segment of agriculture in New York, with roughly 6,200 producers statewide.

The slumping economy has softened demand for dairy products in both domestic and foreign markets, creating a surplus of dairy product further driving down prices.

In January, the average price that farmers received was $13.39 per hundredweight, or $1.15 per gallon, which is far below the average break-even cost of $17.50 per hundredweight or $1.50 a gallon.

Farm Bureau is calling on New York congressional delegation to urge USDA to take the following action:

  NYFB is asking for an increase of the Milk Income Loss Contract payment program. MILC payments are triggered when the Class I price in Boston has fallen below $16.94 per cwt. The base payment rate is any positive difference between $16.94 and the Class I milk price at Boston, times 45 percent. Payments under the program are limited by production. Producers are eligible to receive payments on up to 2.985 million pounds per fiscal year.

  Provide immediate, additional funding for the Milk Income Loss Contract payment program through supplemental appropriation and/or the FY 2009 Agriculture Appropriations Bill.

  NYFB is asking USDA to utilize commodity data that more accurately reflects northeast feed costs as part of the MILC payment rate formula. Feed commodity data should be based on northeast or New York State feed costs for calculation of the feed cost adjuster, which determines the MILC payment rate. The current commodity-cost data is based on feed costs from the Midwest and shortchanges New York farmers by not basing the MILC payment rate on true Northeast feed costs.

  Move dairy powder off the domestic market by fully utilizing the Dairy Export Incentive Program and Food for Peace program to offset overproduction.

  Reinstate the Northeast Interstate Dairy Compact to provide long-term sustainable support to the dairy industry. The original compact, which was operational between 1996 and 2001, allowed New York and the six New England states to join together to set a fluid-milk price above the federal minimum milk price.

  Make immediate dairy-product purchases for WIC and other nutrition programs. Those programs received large increases in funding from the stimulus package.

"Each of these measures will provide relief to the economic challenges facing New York's dairy farmers and effectively preserve domestic dairy production," Norton said. "Most importantly, these measures will maintain the economic backbone of New York's rural communities and agriculture infrastructure."

New York Farm Bureau is the statewide lobbying/trade organization that represents thousands of member families. Its members and the public know the organization as "The Voice of New York Agriculture." New York Farm Bureau is dedicated to solving the economic and public policy issues challenging the agricultural community.