It would be illegal to use stimulus funds to help struggling dairy farmers, according to Gov. David Paterson's office.

Dairy farmers, of course, create and retain jobs and help provide an essential food product. Agriculture is a significant part of Upstate New York's economic well being.

Meanwhile, the D&C reports today that Rochester's homeless program, with a regular annual budget of $400,000, is receiving $4 million in stimulus funds.

No slam here against the homeless or helping the needy -- government handouts to both dairy farmers and the homeless raise certain small-government and free market philosophical issues ... but, isn't something amiss here? 

If stimulus money is supposed to, you know, stimulate the economy (at least in theory), shouldn't it actually go to programs that, you know, might actually stimulate the economy?

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.

Local dairy farmers will join Assemblyman Steve Hawley in a rally in Le Roy at 11 a.m., calling on Gov. David Paterson to use federal stimulus funds to aid struggling dairies.

The dairy industry is caught between historically low prices for milk and rising production costs.

Stimulus funds are needed to stabilize Western New York's economy and create and maintain jobs, according to Hawley.

Hawley will be joined at the rally by Assemblyman Cliff Crouch (R,I-Guilford).

Statement issued by Hawley's office:

New York State's family dairies are currently facing the most difficult economic conditions in the modern history of the industry. Dairy producers are being paid prices that are catastrophically below the price of production for their milk, regardless of the size of their operations, and economists predict that fluid milk prices may not increase for another year.

The governor's office has indicated that the stimulus funds can't be used in such a manner, but at the same time, a Catholic charity in Buffalo recently received stimulus funds to support its efforts.

The rally will be at Stein Farms, 8343 Gully Road, Le Roy.

With dairy prices at a 30-year low, Genesee County dairy farmers may find some relief in new USDA price supports.

The government is essentially agreeing to pay above-market prices for some dairy products as part of the Dairy Product Price Support Program. In this 60-year-old program, the government buys dry milk, butter, and cheese and stores these products until they can be sold on the open market or donated to domestic or international charitable programs.

From a Rep. Chris Lee press release:

The increase, announced this morning by Agriculture Secretary Tom Vilsack, will raise the price paid for nonfat dry milk from $0.80 per pound to $0.92 per pound, the price paid for cheddar blocks from $1.13 per pound to $1.31 per pound, and the price of cheddar barrels from $1.10 per pound to $1.28 per pound. Temporarily raising the price of these dairy products increases the price that dairy farmers receive for their milk.

The price increase will be in effect for three months. It is expected to boost dairy revenue by $243 million.

Congressional members with a shared interest in the fate of dairy farmers have revived a caucus to work together on those concerns, and Rep. Chris Lee has been selected as a co-chair of the committee.

Other representatives from New York are Democrats Paul Tonko and Louise Slaughter.

Caucuses are officially sanctioned groups of lawmakers who join together to promote a common cause. Here's a complete list of such groups.

With dairy prices at historical lows, and production costs remaining high, dairy farmers have been looking to Washington for assistance and support.

The new caucus gives congressional members with a shared interest in dairy farming a means to study dairy farming issues and come up with recommendations that could conceivably lead to legislation or other assistance.

WBTA's Geoff Redick posted the final installment of his well-done five-part series on the dairy-price crisis from the perspective of Genesee County dairy farmers.

Here's all five parts:

• Part 1
• Part 2
• Part 3
• Part 4
• Part 5

Press Release:

Assemblyman Steve Hawley (R, I, C – Batavia) today joined Assembly Minority Leader Brian M. Kolb (R, C, I – Canandaigua), bipartisan members of the State Legislature, representatives from the State Department of Agriculture and Markets, New York Farm Bureau, New York Grange, Northeast Dairy Foods, and American Dairy Association, along with local New York State farmers in celebration and recognition of New York State Dairy Day. 

Additionally, the coalition discussed the negative impacts of Assembly Bill 1867, dubbed the “Farm Death Bill” and called on the State Senate and Governor to “vote no” on the bill, which was passed by the Assembly last evening.

Hawley stated, “I was a third generation family farmer and I know firsthand how difficult it is to run a farm successfully.  Right now farmers are losing money on every gallon of milk, every pound of grain, because production costs here are so high.  We are in the midst of one of the worst recessions in decades and now is not the time to add additional burdens on our farmers.”

The Assemblyman continued, “This onerous bill, if passed into law, will be the death of New York State’s farms.  Farming is not just a job, it is a way of life and I want to keep that quality of life around for many more generations.”