Dairy bill would stabilize milk prices

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Dairy bill would stabilize milk prices

Mon, 07/12/2010 - 6:57am -- tim

With the Ethan Allen Farm as a backdrop, US Senators Bernie Sanders and Patrick Leahy today unveiled legislation to stabilize dairy prices and preserve the family farms that have been a fixture of Vermont culture for centuries.
Sanders (I-Vt.) introduced The Dairy Market Stabilization Act. The bill was cosponsored by Leahy (D-Vt.), the senior member of the Senate Agriculture Committee. Sen. Patty Murray (D-Wash.), who serves in Senate leadership, also is an original cosponsor of the measure.
“Too many farms that have been in the same family for generations already have been forced out of business,” Sanders said at the dairy farm where John and Joyce Belter and their son Todd manage a herd of 450 Holsteins. “This is a crisis not only for our farmers and the communities that depend on them, but for consumers who demand fresh, locally-produced foods for their families.”
Leahy said, “Dairy farms are vital to scores of communities and to our economy.  For decades it has been easy to take for granted the locally produced fresh milk that generations of Americans have brought to their dinner tables.  But farmers are being driven out of business by cost and price fluctuations that rarely go their way.  This quandary has long been one of the most difficult issues in American agriculture.  Farmers, their communities and dairy consumers would all be better served in the long run with a modest amount of stability.  The Dairy Market Stabilization Act would put us on the path to long term reform to help ensure the survival of our dairy industry here in Vermont and across the country.”
The Vermont senators were joined at the press conference by state Agriculture Secretary Roger Allbee. The outdated system used to price milk needs fundamental reform, he said. “I want to applaud the work of Sens. Sanders and Leahy and the delegation for this legislation,” Allbee said. “This measure will be a message that reform of U.S. dairy policy is badly needed and will move forward.”
Over the last 20 years, dairy industry boom and bust cycles saw the price per hundredweight soar to $19.30 in 2004 before crashing to $11.90 in 2006.  Prices recovered in 2007 to $21.80 before plummeting to $11.30 in 2009.  The sudden price drops devastated Vermont dairy farmers, who need about $18 per hundredweight to break even.  There are 11.6 gallons in a hundredweight, the unit commonly used to measure milk.
Without a dramatic change, the number of dairy farms in Vermont could soon drop below 1,000. The state today has only half as many farms as there were in 1995. With prices today mired below what it costs to produce milk, as many as 200 dairy farms, one-fifth of Vermont’s remaining farms, could be forced to close by the end of this year.
Under the legislation, the U.S. Department of Agriculture working with dairy farmers on a producer board would set a rate for how much farmers could boost production over the same quarter the year before. There would be an assessment on farmers that exceed the growth rate while farmers that maintained stable production would qualify for USDA payments. The growth management initiative would end after three years unless farmers vote to continue it, so a majority of dairy farmers, not the government, will decide whether or not the program is working.
Rep. Peter Welch (D-Vt.) cosponsored a companion bill in the House. “Price volatility within the dairy industry has caused tremendous hardship for Vermont’s hardworking dairy farmers. While short-term relief measures have been helpful, it is clear that only a long-term strategy aimed at stabilizing prices will return dairy farmers to prosperity,” he said. “This legislation puts farmers in the driver’s seat, allowing them to make the decisions necessary to protect their livelihood.”
Unlike other proposals to fix the dairy industry, the legislation is backed by both farmers and industry groups across the country. These include Addison County Young Farmers, California Dairy Campaign, Dairy Farmers Working Together, Farmers Union Producers Association, Georgia Milk Producers, Hoard’s Dairyman Magazine, Lanco-Pennland Quality Milk Producers, Milk Producers Council, National Farmers Union, Oregon Dairy Farmers Association, Pennsylvania Holstein Association, Vermont Holstein Association, and Washington State Dairy Federation.
Source: Leahy and Sanders. SOUTH BURLINGTON, Vt., July 12, 2010