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Dairy farmers bear brunt of farm bill stalemate

Sunday, October 14, 2012
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 David Rama, right, and Horace Backus, left, auction off a dairy cow during the 31st annual Dairy Fashions Sale at SUNY Cobleskill on Saturday, March 31, 2012.
Photographer: Patrick Dodson
David Rama, right, and Horace Backus, left, auction off a dairy cow during the 31st annual Dairy Fashions Sale at SUNY Cobleskill on Saturday, March 31, 2012.

— It’s been a difficult few years on Maple Downs Farm in Middleburgh.

The farm was devastated last year by flooding caused by Tropical Storm Irene, and challenged by this year’s drought. Fuel and feed prices have risen, while milk prices have been fairly low.

The federal government’s Milk Income Loss Contract program provides the farm with a bit of a cushion during especially lean periods. So far this year, Maple Downs Farms has received six monthly payments through MILC, which compensates dairy farmers when milk prices fall below a certain level. The size of the checks varies; a recent one was $3,500.

“[MILC] helps smaller farmers,” said Denise Lloyd, who, along with her husband David, owns the 150-head Maple Downs. “It is not the best solution out there, but it does provide a safety net.”

But that safety net disappeared on Sept. 30, when the 2008 federal farm bill expired.

“We haven’t felt the impact yet, but we are going to feel it down the road,” said David Lloyd.

The farm bill funded an array of agricultural, conservation and social programs. While most of those programs are funded for at least the next few months, the MILC program is not. As a result, dairy farmers are bearing the brunt of Congress’ failure to approve a new bill before they recessed until after the election.

“It’s very frustrating,” Denise Lloyd said. “They up and left and didn’t take care of this bill. I don’t understand how they could just up and leave. We’re still shipping milk every day.”

John Radliff, who owns School Hill Farm in Cobleskill, said the inaction on the farm bill hurts farmers and consumers, and that a surge in milk prices would be problematic. “We want to keep the consumer’s confidence,” he said. “We want to keep them buying milk. If we don’t do something, we’re going to lose the consumer’s confidence, and it’s going to take time to get that support back.” He blamed Congress for “politicizing food.”

Radliff has 95 head of cattle, 40 of which he milks. He said he would “take a hit” as a result of the expiration of the MILC program, but that he would be able to keep going without it.

In August, the average dairy farmer received $18.30 per hundredweight — 100 pounds — of milk, about 11.6 gallons. That is $5.20 less than they received a year earlier.

Can’t predict

The New York Farm Bureau also condemned Congress’ lack of progress on the farm bill.

“We’re still in limbo,” said Steve Ammerman, a spokesman for the bureau. “The biggest concern is the uncertainty. We don’t know what will happen.”

The two biggest farm bill programs, the Supplemental Nutrition Assistance Program, better known as food stamps, and federal crop insurance, constitute about 90 percent of farm bill spending. These programs, however, are not in immediate jeopardy. Most of the farm commodity subsidies and support structures contained in the 2008 bill don’t need to be renewed until the spring planting season, and both food stamps and crop insurance survive under continuing resolutions.

The future of other farm bill-funded programs is unclear.

A number of programs designed to support sustainable farming and conservation stopped accepting new enrollments on Oct. 1. This list includes programs that helped protect wetlands and grasslands, supported new farmers and ranchers, and promoted farmers markets. The organic certification cost-share program, which helps defray the costs of organic certification for farmers, has come to a halt, at least temporarily.

“The big question is how long is this situation going to continue,” said David Haight, director of the Saratoga Springs-based New York office of the American Farmland Trust, which advocates for the preservation of farmland and ranchland. “A number of conservation programs expired with the last farm bill, and these programs were very popular with farmers in New York. If the situation is resolved after the election, farmers in New York may not be affected.”

Kate Mendenhaal, the executive director of the Northeast Organic Farming Association, said the organic certification cost share program should be restored.

“A lot goes into the organic certification process,” she said. “It can be expensive for a small farm.” She said the proposed farm bills included funding for the program, but she’s worried that Congress will draw up a new bill that eliminates this funding. “It’s a great program, but it tends to need a lot of community effort to keep it,” she said.

The Senate’s proposed 10-year, $969 billion farm bill includes $768.2 billion for food stamps and nutrition, $43.2 billion for commodity programs and $94.6 billion for crop insurance.

Program change

The proposed farm bill replaced MILC with an insurance program that would provide dairy farmers who enroll with a basic level of protection against low prices and high input costs, plus the option to purchase supplemental insurance. Dairy farmers who participate in the insurance program would also be required to participate in a market stabilization program; this program would create incentives for limiting milk production. The hope is that tightening supply will reduce the volatility in milk prices.

The market stabilization program is controversial.

The Syracuse-based Northeast Dairy Foods Association, a group composed of companies that purchase milk for manufacturing, such as yogurt makers, supports the insurance program, but opposes the market stabilization program.

“We need more milk,” said Bruce Krupke, executive vice president of the association. “The dairy farmers want to make more money, but creating a program that reduces the milk supply is not a rational way to go about it.” He said yogurt sales have surged, largely because of the booming popularity of Greek yogurt, and that cheese consumption is also on the rise.

But David Lloyd said the market stabilization program is a good idea.

“It only takes a little overproduction to drive the price of milk down,” he said. “We’ve been on a roller coaster.” Farmers who want to overproduce could do so under the program; they just wouldn’t get as much money for their supply.

Radliff expressed skepticism about the government’s ability to help dairy farmers. “I’m not looking for much help from the federal government,” he said. “We won’t know the facts until the farm bill is passed.”

Congress is expected to return after the election, and the hope is that a new farm bill will be passed then.

Krupke said he didn’t see any reason to panic.

“We believe that Congress will pass it during the lame duck session if Obama is elected, and if Romney is elected it will be extended,” he said.

But if legislators fail to pass a farm bill by the end of the year, the consequences could be severe, for both farmers and consumers.

“It would be disastrous for everyone — for the government, consumers and industry,” Krupke said. “But there’s no way the farm bill will not be addressed and dealt with by the end of the year.”

If Congress fails to act, the 1949 farm bill, the last permanent farm bill, would become the law of the land.

This decades-old farm bill requires smaller crops and higher market prices, and doesn’t cover crops that have become popular in more recent decades. For example, under the 1949 farm bill government-supported milk prices would be about four times higher than current law, while crops that weren’t widely grown in the U.S., such as soybeans, would be excluded from the government’s commodity programs.

 
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