Price increases for dairy farmers

Senators show suppor; will it be enough?

By FRITZ MAYER & TOM KANE

REGION — Cindy Gieger owns a dairy farm with her husband, Stefan, just outside of Jeffersonville, NY. She said in a phone call on August 5, “I’ve been farming here for 24 years and when I met my husband, we supported two families on a 70-cow dairy. But now, we can only support one family on a 70-cow dairy.”

Her analysis of the problems facing small dairy farmers both locally and across the country echoes what others have said. Consolidation has lead to a limited number of large, powerful milk cooperatives, as well as a growing number of large 5,000- cow farms that are driving the small family farms out of business.

Gieger said the supersizing of the industry has actually backfired in the United States, because too much milk is being produced here. Add to that a complex formula that the federal government uses in setting milk prices that very few people understand and because small farmers are now losing money on every gallon of milk they sell, due to the recession and other factors, the situation for many farmers is dire.

Now, after pressure from senators in New York and Pennsylvania and elsewhere, the United States Department of Agriculture (USDA) has moved to raise a temporary increase in the Dairy Price Support Program which, according to a press release, “will begin to restore farm level prices and help restore producer’s ability to produce basic cash flow for their operation.”

The USDA will raise the price paid for nonfat dry milk from $0.80 per pound to $0.92 per pound, the price paid for cheddar blocks from $1.13 per pound to $1.31 per pound and the price of cheddar barrels from $1.10 per pound to $1.28 per pound. According to the USDA, this increase will have an immediate effect upon dairy farmers’ bottom line.

After that announcement was made on July 30, senators Charles Schumer and Kirsten Gillibrand announced passage of an amendment to the agriculture spending bill that will direct $350 million to help farmers struggling during the dairy crisis.

Schumer said, “Our dairy farmers are hurting. A large step was taken last week when we convinced USDA Secretary Tom Vilsack to increase prices paid to farmers, and this is an important second step. We need more to ensure that our dairy farmers survive this crisis and we will continue working to make sure that they do.”

Pennsylvania senators Arlen Specter and Robert Casey also lauded the action, even though the price increases approved by the USDA are temporary. Specter said in a speech on the Senate floor, “I am pleased my colleagues have recognized the importance of adopting this amendment to give some much-needed relief to dairy farmers.”

But will the increase actually stem the flow of dairy farm closures and make it possible for small family farmers to remain a permanent part of the economy?

Gieger isn’t sure. She said, in the short term, the extra funds would be helpful. But, she said, “Pushing money at the problem isn’t going to fix the problem. We have to recalculate the milk price, which is a complicated thing and it has to do with politics. Senators have to support family farms, not just milk production.”

At least one senator thinks that more than price recalculation is called for and is calling for an investigation of one of the largest milk distribution companies in the United States. Bernie Sanders of Vermont is calling for a U.S. Justice Department investigation of Dean Foods, which controls about 40 percent of the milk and milk products marketed domestically. Sanders wants anti-trust issues to be investigated and is one of a growing number of voices on Capitol Hill calling for a total revamping of the way milk is priced and sold.