Low milk prices causing problems for dairy farmers

The Dairy Premium Refund Act would return federal insurance premiums to farmers. Declining milk prices have posed a large problem.

Upstate Niagara Cooperative Chief Legal Officer Tim Harner said you tend to see a three year cycle. Milk prices get high, then farmers build a farm and buy more cows. After production increases, prices go down and that brings certain consequences.

”You have a painful process of, ‘Oh my god I borrowed money to buy the cow. And now how do I retire that debt‘? So you have this cycle. It’s just science. It’s just agriculture,” said Harner. “People are used to machineries. You have their production line run and then you turn it off for two weeks. Now you rationalize the supply of cars you want to sell.”

The time table for agriculture production is usually longer than a manufacturing or service based industry. Harner said that’s why you need separate policies for workers like dairy farmers.

In the meantime, a bipartisan effort from Congress pushed through the dairy safety net reform last Friday. Politicians believe this offers new insurance options at more affordable costs.

“We’re a member of National Milk Producers Federation,” said Harner. “They worked and got a package together to improve the Margin Protection Program. Of course, there can always efforts to improve the safety net for farmers even more when the next farm bill comes up.”

Harner said the insurance program from 2014—the Margin Protection Program– hasn’t worked.

“Given the pricing for milk and the way different technical things were done, it’s like any insurance policy. When you get in to the details, it was not as helpful as had been hoped,” Harner said.

New York State dairy farmers produce more than $2.51 billion worth of milk per year on 4, 420 farms across 53 counties.

 

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