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Dairy farmers hold teleconference to lament cost of production

June 20, 2013 | 0 comments

Dairy farmers unhappy with the dairy title in the farm bills being discussed in Washington held a conference call with reporters last week to talk about their concerns that dairy farmers' cost of production is stripping them of viability.

Arden Tewksbury, a lifelong dairy farmer from Pennsylvania, said that every farm is different and every dairy farmer has different costs, but U.S. Department of Agriculture figures show that all dairy farmers across the country are struggling to cover the high cost of feed and other inputs on their farms.

With those costs of production at $19.25 to $24 per hundredweight of milk, farmers are left $5 short, he said, and that loss of profitability is driving farmers out of the industry.

There are now less than 50,000 U.S. dairy farmers, he said and the number gets smaller every year. "We feel there's not anything in the current farm bills that will straighten this out."

Since 1981 when the support price was whittled down, farmers have been getter farther and farther away from receiving their cost of production, he said, and the situation is the same from California to Vermont.

"Thousands and thousands of consumers are asking why dairy farmers can not make their cost of production," he added.

Loren Lopes, dairy producer in Turlock, CA, said that his state's dairy industry is in trouble with the rising cost of feed and a cost of milk that doesn't keep up. California dairy officials believe that the "survival" cost for producers there is $19 a hundredweight.

California dairy farmers have been the low-cost supplier of milk for years, but "now it's not sustainable anymore."

"We've been losing equity for five years and in that time 387 dairies went out of business," he said. In some cases milk checks have been seized by banks.

"It is imperative that a breakeven milk price be in the new farm bill. The cost of inputs continues to go up. Yesterday I brought home a small box of veterinary pharmaceuticals and it cost me $1,014.06. Seed corn is $220 a bag this year. Last year it was $190 a bag."

Lopes said he didn't believe the margin program in the current farm bill proposals would make up for these escalating production costs.


Wisconsin dairy producer Joel Greeno said his family has been involved in dairy farming since 1872 and his family members have fought in every war since the Revolution.

But he's unhappy that today he and his wife and daughters can't get a fair price for what they do. "I can't say how unhappy I am about the plans in these farm bills."

Greeno said as a recent Midwest Dairy Coalition meeting, people talked about the dairy margin insurance plan that's included in both the House and Senate farm bills. "Not a single dairy farmer raised their hand in favor of that plan.

"It's frustrating. It's the wrong things, wrong time, wrong place and we wonder why. We don't want to be labeled as negative whiners and cry-babies but in addition to losing family farmers we are seeing the loss of local rural businesses that close because farmers don't have the money to patronize them.

"It's hard to see our rural communities falling apart."

Many farmers absolutely cannot keep going, he said. "When the money runs out the game is over."

Pennsylvania dairy producer Brenda Cochran said dairy farmers continue to be beaten down by an "unjust federal dairy pricing formula" that reflects a "blatant" disconnect between dairy farm production and benefits that are conferred on processors.

The "make allowances" that allow dairy processors to cover their costs amount to program subsidies for dairy special interests.

Current proposals are "inexcusable and shameless" and have disenfranchised dairy farmers even though they have tried to be heard, she added.

Gretchen Main, a Waterville, NY, dairy producers is a third-generation farmer with 500 acres and 50 cows. The last 10 years have been the hardest, she said, since there is no provision for cost of production in the milk pricing system.

"It's only based on providing a cheap supply of milk. Margin insurance will only cover some of our losses," she added.

Under the Dairy Security Act (DSA,) which is the dairy title of the current farm bill, insurance will be paid by the taxpayers, insurance won't be enough and supply management is not mandatory, she said.

Main said that farmers with large herds won't participate in the program so they won't need to reduce their supply. That means the farmers with smaller herds will need to cut back production, maybe even sell some cows.

This spiral would likely continue in successive waves of supply control, she said, until eventually large farmers would be able to "gobble up the little guy's land so they can expand some more."


Tewkbury said that the National Family Farm Coalition, of which all the farmers on the call are members, doesn't really care what the formula is as long as it allows dairy farmers to cover their costs of production.

In a perfect world there would only be two classes of milk in the federal pricing formula as well - Class I for bottling and Class II for everything else, he added.

Kathy Ozer, executive director of NFFC, said her members are keeping a close eye on what comes out of House farm bill amendments. In the Senate, one her group endorsed was introduced by Sen. Kirsten Gillibrand (D-NY) which called for the Agriculture secretary to hold milk pricing hearings across the country to hear from dairy farmers.

Ozer said her organization believes the best hope for dairy producers is that the Gillibrand amendment remains in the conference version of a farm bill, when the House gets done with its version.

"The version going through Congress is being pushed by National Milk Producers Federation or the International Dairy Foods Association. The experience of real dairy farmers is not being heard," she said.

"I don't think there will be a provision in the House version that will help dairy farmers."

Her organization believes that the dairy title of the farm bill is not sustainable for the long term. "The price has to be floored with something."

Richard Becker, a New York dairyman who was on the call, said he came across a milk stub from his farm from 1990 when received $14 a hundredweight. Twenty-three years later that milk price has only risen to $19 a hundredweight, he said.

"That same thing hasn't happened to a gallon of gas or a loaf of bread. We're not being represented by our coops, or by our leaders," he emphasized.

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