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State Legislators Take on Dairy Crisis

By Steve Taylor | Lancaster Farming

BURLINGTON, Vt. — Doomsday looms in October for many Northeastern dairy operations unless significant actions at the federal level come about and the period of $11-12 farm milk prices is halted.

That was the view of a group of state legislators huddling at the eastern conference of the national Council of State Governments (CSG) this week.

They fear hundreds of farmers will either call it quits or be forced into liquidation before winter sets in if the current milk price depression continues with no hope of an early turnaround.

News of USDA Secretary Tom Vilsack’s action last week increasing the price the government will pay for cheese and milk powder-expected to boost farm milk prices somewhere between $1 and $1.50-was welcomed, but nowhere near enough to get farm income close to costs of production, the assembled lawmakers argued.

“October will be an epiphany for consumers and farmers alike if things don’t improve,” said state Senator Darrell Aubertine, (D-N.Y.), a dairy farmer.
“Unless we see significant change it’s going to destroy the infrastructure of agriculture here in the Northeast. And as goes dairy, so goes a lot of other agriculture here, even forestry.”

Aubertine said there are “a lot of issues out there” that state decision makers need to work on, while there are lots of other people “working to divide and prevent what we need to do.”

He listed top issues that need to be addressed if there’s to be improvement in dairy fortunes and stability for the long term. At the top of his priorities is an end to block voting by dairy cooperatives, which he sees as causing individual farmers to withdraw from involvement in policy making and coop leaders to often act against the interests of their members.

“Stop and haul” needs reform, Aubertine said, noting that ownership of milk changes to the buyer when it is commingled in the pickup tanker, yet farmers are still stuck with the cost of transporting the product to the processor.

Reform is needed in the way the National Agricultural Statistics Service tracks the value of dairy products from the thinly traded Chicago Mercantile Exchange to a method that reveals actual retail values of cheese, butter and other dairy products.

Aubertine says rising volumes of milk protein concentrate (MPC) are largely responsible for the 2 percent surplus of farm milk that’s having a 30 percent negative price impact.

The session, moderated by former New Hampshire House Agriculture committee chair Jay Phinizy, heard reports on what various states are doing individually to try to help their dairy sectors. Maine and Connecticut both have appropriated state general fund money to increase producer pay prices over the federal blend level.

Maine’s program delivers a higher premium to smaller farms, though the four largest farms will each collect in excess of $100,000 from the $13-million state fund, causing fear the public won’t be so likely to support extra aid to dairy in the future. Connecticut has put up $10 million, but lawmakers are anxious for some permanent fix rather than dealing with desperate calls for help every two or three years.

Vermont has made selling raw milk at the farm easier, and New Hampshire has modified its labeling laws to encourage “buy local” interest. Massachusetts has shifted 10 cents per hundredweight of promotion checkoff money away from the regional promotion agency to an in-state body to try to boost sales of local milk.

Stephane Billette, a Quebec provincial senator, explained the Canadian dairy quota system, under which he said, “Everybody makes money.” But the high cost of entry for young farmers — $25,000 per cow just for a quota allocation — is causing increasing concern.

Speakers representing states from Maine to Maryland agreed that if the critical mass of dairy production in the Northeast is diminished that consumers would be the long-term losers.

“When milk is worth $50 a hundredweight at retail and the farmers only getting $11 of that, there’s enough money in the system to get a decent price back to the farmer,” said Bobby Starr (D-Vt.), state senator and longtime dairy activist.

The assembled CSG delegates adopted several resolutions calling for reform of the milk pricing system and further action by USDA to improve dairy farm economics.

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