The senator’s legislation would create a new price floor for milk.
WAER’s Scott Willis reports, Senator Kirsten Gillibrand says she has an idea that could help dairy farmers struggling with historically low milk prices. The senator’s legislation would create a new price floor for milk.
Gillibrand is a member of the senate agriculture committee, and is urging colleagues to include the provision in the upcoming five-year farm bill. She said in a conference call that most of the state’s 4,400 dairy farms are operating below the cost of production, which threatens them, their families, the economy, and rural communities.
“Farmers are being paid $16.10 per hundred weight. The average cost of production is nearly $23. Farmers just can’t turn production on and off when milk prices change. Cows have to be milked, and milk spoils if it’s not used. That means dairy farmers have been forced to have low prices for too long.”
Gillibrand says when milk prices drop below the price floor, the Dairy Farm Sustainability Act will automatically trigger a payment to stabilize dairy farm operations. The money would come from the treasury, and cover only part of the difference. She says the federal government’s poorly designed dairy farmer insurance program is not paying out, and leaves farmers no place to turn for relief. Gillibrand says most of the problem is tied to how milk and dairy products are priced.
“The price of milk is set by the price of cheese in Chicago. There’s a lot of price manipulation and there’s probably fraud within the system. The cost of production and the price of milk are not related at all. Until you address fraud and the manipulation with the pricing of cheese, you won’t actually fix the problem for liquid milk.”
The price of liquid milk is largely dictated by what’s called federal milk marketing orders, which pays farmers based only on fluid milk consumption versus what’s used to make cheese, yogurt, or sour cream. Gillibrand says she’s been working to change the formula since she’s been in congress.
She says the farm bill is usually bi-partisan, but worries dairy provisions might make it harder than it should be.
“Members of the senate on the agriculture committee are typically from states that have commodities, or beef production or livestock production. Not a lot of dairy states are well-represented on the committee.”
Gillibrand says their chances of success depend on how much dairy farmers raise their voices and elevate the conversation.
By: Scott Willis