Dairy farmers looking for any lifeline in sinking milk market

Posted by Howard Owens on September 16, 2009 - 11:36pm

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There's something out of whack with the market for dairy products -- the price of production continues to go up, while the price dairy farmers get for their milk remains at historic lows, but for the rest of us -- us consumers -- we're paying just as much as ever for milk and cheese.

Somebody's making a lot of money off the hard work of Genesee County's dairies, but it's not the farmers nor their workers.

In fact, some of them are facing the devastating loss of their businesses.

"The price of milk since January has been very low, to the point that we’re going to lose about $300,000," said Le Roy dairy farmer Dale Stein during a dairy rally at his farm called by Assemblyman Steve Hawley. "We anticipated through September that it would be low, but the price has still not come back up in September and now they’re looking at March, so we’re borrowing another large set of money to get through until March. The problem is now, there are many farmers who can’t get any more credit due to the large size of their loss. We’re able to borrow money, but we’re here today because of so many farmers who can’t."

Hawley and Assemblyman Cliff Crouch (R,I-Guilford) are calling on Gov. David Paterson to release more than $150 million in state funds (half this year and half next) to assist the state's family-owned dairy farmers. They're also calling on Washington lawmakers to change the price-setting mechanism and supports for dairy products.

Crouch believes the money should come either from unspent funds from around the state or from federal stimulus money, but state officials are saying the federal government won't allow ARRA money to be used to help dairy farmers.

"I think where there's a will there's a way," Crouch said. "We've seen different incidents where stimulus money has gone out and we've really raised our eyebrows and can't understand why it got spent in that direction. And here's an industry that's here and it's going to be closing down if we don't do something to help it. For every dollar that's spent on a New York dairy farm, between $3 and $7 goes back into the local economy. If that isn't economic stimulus, than I don't know what is."

Recently, ARRA money went to a Catholic charity in Buffalo, and Gov. Paterson also authorized a $200 payment per child for needy families to help with school supplies, using ARRA funds.

Crouch said that it's time for Gov. Paterson to step up and offer assistance to the state's dairy farmers -- even if it's not the $75 million they seek this year, Paterson should at least be in Washington lobbying for his state's dairy farmers.

Photos: Top, Dale Stein speaks during the rally. Bottom, Lori Hawkins, an unemployed milker, showed up at the rally to let it be known she is looking for dairy work.

Howard Owens
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Posted by william tapp on September 17, 2009 - 8:25am

i know dairy farming been good for years but they brought this on them self's, they keep adding more and more cows to there heards, supply and demand , supply got more then demand. very simple, cut back on cows and price of milk will go back up in time.or we need less dairys.they don't need government support just less milk to bring prices back up.
i know farm prices have been bad from crops, so they tried to make it up on milk , prices of fuel and every thing else has made it tough on the farmer.i guess i really don't know what the real answer is damm if you do and dam if you don't. i don't want to see the farmers go but some thing had to be done.try to find more outlets for there milk.

Posted by E. S. Sherman on September 17, 2009 - 8:28am

William I sort of agree with that. Also they have devalued themselves by hiring all kinds of cheap labor and trying to keep costs down for so many years. As soon as the price goes up all of these big farms add cows so then there is a flood on the market and the price starts dropping. As William says keep adding cows so the price stays down. You can not convince some that is how it works but it does

Posted by Bryant Tyson on September 17, 2009 - 10:31am

I also think there are less milk drinkers than in years past. My Dr. told me last time I seen him there is no need for any adult to comsume anything from a bovine's mammary gland.
It's been down hill from the time they did away with the Milk Man!

Posted by Dale Stein on September 17, 2009 - 1:06pm

At present the US is short of milk. The problem with the farmer price not yet coming up is do to how the price of milk is calculated in the US. The national price starts with the sale of cheese on the chicago merc. exchange, the is less the 1/4 of 1% of the milk produced in the US. We are working with washington trying to get milk priced based on 5 or 6 locations around the country to be more fair.Also the price the farmer has recieved is down 45% from last yesar, while the price for the consumer is down only from 7 to 15%. The processors and the reail end have learned like big oil last year the american consumer will pay for products even when the seller is making a huge profit. Processing companies have set very large profit increases this year. Th farmers in NY are going to lose about $500 million this year. That is why we are upset.

Posted by Bea McManis on September 17, 2009 - 1:29pm

Dale,
Years ago I read about the surplus cheese program. I seem to recall that processors could store their cheese in government warehouses, then would remove their product and the government received the surplus (which is distributed to schools and other facilities).
The upshot was that while it cost nothing for the processors to store the cheese, the cheese was aging, thus becoming more valuable as a commodity. Ergo, the processors received back a product they could sell for more with no investment in time or climate control. Is that still in effect?

Posted by Dale Stein on September 17, 2009 - 7:32pm

the government buys cheese and powdered milk at the base floor price when there is a surplus. In the past year they have bought o lot almost exclusivly from western US states. the gov. supplies the millitary and other gov. programs with the stored product. I am not sure if they will sell it back to someone, I do know they will not give it back free.

Posted by Sean Valdes on September 17, 2009 - 8:45pm

Dale, I have so many questions on this issue. Just a couple now - 1. what would happen to dairy if it went to a true free market system? You charge your price, the next guy can charges his price, and so forth. I'm also not sure how the government comes into this equation - do they subsidize dairy operations? How do they effect the price?

Posted by Dale Stein on September 18, 2009 - 9:05pm

the reason the present situation was created was because the small farmer could not sell his milk. The buyers got it from the larger producer, this was in the 1930's,so the gov. created a uniform system for pricing and moving milk.It worked great until the number of buyers became much smaller do to consolidation of the processing companies until now it is only a few buyers in each region of the country.We have also seen very large growth in the size of farms particularly in the mid to far west, where 30 to 50,000 cows on one farm are seen.the dairy business is following the chicken and pig farming where consolidation, the Walmart effect, is the norm and the mid to smaller farming is not profitable enough to support a middle class income.we need a system to control growth in total milk produced without pricing milk to high so as to make unlimited importation of milk products that will offset our milk.the gov. does not send me a chck for support unless the milk price gets very low like it is now, but in my farms case that totals only 1 to2% of my budget it is not a lot and only is available when prices are low like now. the rgulations I have to follow for health and environmental safety reasons cost my farm over $100,000 per year. so the gov. support does not equal the cost ot regs I have to follow.