agriculture

Press release:

Washington, DC - U.S. Senators Charles E. Schumer and Kirsten Gillibrand urged the House-Senate Conference Committee to include $350 million for the U.S. Department of Agriculture to help New York farmers struggling during the dairy crisis in the final Agriculture Appropriations Bill.  Senator Bernie Sanders of Vermont authored the provision that was included in the Senate version of the legislation. 
 
“Our dairy farmers are hurting.  A large step was taken when we convinced Secretary Vilsack to increase prices paid to farmers, and this is an important second step.  We need more to ensure that our dairy farmers survive this crisis and we will continue working to make sure that they do,” Senator Schumer said.

 
“During these tough economic times, this increase will bring some much needed relief for our farmers,” said Senator Gillibrand, the first New York Senator in 40 years to serve on the Senate Agriculture Committee. “While this is great for New York's dairy farmers, this is only a temporary solution to the fundamental problems with the dairy pricing system.  I will continue to work for a long term fix for our farmers.”
 
New York farmers are facing a dairy pricing crisis. According to the USDA it costs a New York dairy farmer $18.82 to produce a hundredweight of milk. Yet in July the average New York farmer received only $11.60 per hundredweight, though a number of farmers reported receiving even less.  The Milk Income Loss Contract (MILC), which was designed to be a safety net when there is a large price discrepancy, has not been able to adequately protect New York’s dairy farmers. As a result, New York farmers have been forced to either take on massive debt to cover their costs or go out of business.
 
In their letter, Senators Schumer and Gillibrand joined with 27 of their Senate Colleagues, writing, “America needs a strong, diverse dairy industry to feed our nation and keep rural communities thriving.  If retained in the final Agriculture Appropriations Conference Report, the funds provided by this amendment can be utilized by Secretary Vilsack to provide relief to America’s dairy industry.  These funds are crucial to helping hasten the recovery of farm milk prices this fall.”
 
The Agriculture Appropriations Bill is now being reconciled by the House-Senate Conference Committee, before final passage in both chambers, and sent to the President to become law.

Relative to our discussions recently about dairy farms is this chart showing the decline in food-dollar share going to farmers since 1950.

As Daily Yonder points out, some of the decline is due to the increase the amount of money people now spend eating out rather than at home. While eating out doesn't mean farmers make less, per se, it does mean the overall amount of dollars spent on food has increased, with a good portion going to the mark-up of restaurants.  (Sadly for social capital, much of the increase has gone to fast-food chains, where people are generally less social than in the corner diner.)

Now, there has been some relief for consumers recently, with grocery prices dropping as much as 25 percent on some items, but that doesn't necessarily spell relief for farmers.

There are numerous problems facing farmers, from the rise of conglomerate buyers (decreased competition) to price discovery structures that may not fit with modern technology and communication.

Still, this chart backs up something Steve Hawley told me two days ago: Farmers he knows are getting the same price for their products that he got when he was a hog- and cash-crop farmer 30 years ago.

Meanwhile, all of the costs associated with running a farm has continued to go up, from labor to fuel and fertilizer and insurance.

Farmers are in a tough spot and now we have China threatening a trade war over chickens and tires.

A lot of these problems seem inter-related, from high government spending driving up taxes, to the purpose of anti-trust law being turned from its original intent, which was to ensure small-business competition. The law has morphed into ensuring that consumers get the cheapest price at Wal-Mart, thus fueling the rise of conglomerates and pushing U.S. jobs overseas in search of super-cheap labor.

This isn't a problem the government can necessarily fix for us. Consumers need to be smarter about how they flex their purchasing power, spending more money with locally owned businesses and avoiding big-box conglomerate retailers as much as possible.

Especially, buy locally produced food as much as possible.

New York's apple growers have won approval to provide cleaned, sliced and bagged apples to area schools.

The USDA has eased restrictions on what "processed food" means for the purpose of distributing locally grown agriculture products to local school children.

Sen. Kirsten Gillibrand, in a press release this morning, said she lobbied the USDA for the change.

“We have to let our farmers do what they do best, and that’s deliver fresh fruits and vegetable to local communities,” said Senator Gillibrand.  “New York farmers produce some of the highest quality, fresh produce in the country. The Farm Bill was supposed to make it easier for farmers to sell produce directly to New York schools, and this USDA ruling will finally ensure that our students will have healthy New York produce and our farmers can earn the extra income that comes from providing value-added products such as pre-cut apples. During difficult economic times, we need this new market to create jobs.”

Full press release after the jump:

Washington, DC – After leading the fight on behalf of New York farmers, U.S. Senator Kirsten Gillibrand secured a commitment from the U.S. Department of Agriculture (USDA) that will allow New York farmers to process fresh, locally grown fruits and vegetables for children to snack on in New York schools.  In February, Senator Gillibrand sent a letter to Agriculture Secretary Tom Vilsack requesting that he change an administrative rule barring local farmers from delivering pre-cut and packaged fruit and vegetables to schoolchildren.  This week, on a phone call with the USDA Deputy Secretary Kathleen Merrigan, Senator Gillibrand received a commitment that the USDA will reverse this interpretation and open up the Fresh Fruits and Vegetables Program to allow local farmers to participate.

“We have to let our farmers do what they do best, and that’s deliver fresh fruits and vegetable to local communities,” said Senator Gillibrand.  “New York farmers produce some of the highest quality, fresh produce in the country. The Farm Bill was supposed to make it easier for farmers to sell produce directly to New York schools, and this USDA ruling will finally ensure that our students will have healthy New York produce and our farmers can earn the extra income that comes from providing value-added products such as pre-cut apples. During difficult economic times, we need this new market to create jobs.”

State Senator Darrel J. Aubertine, D-Cape Vincent, chair of the New York State Senate's Agriculture Committee said, “When we make local food available in our schools, our children get the freshest and finest produce available. We asked Secretary Villsack and the USDA to review this because the enforcement of de minimis handling had been contrary to what the bill’s authors and all of us in the farm community were looking for. I’m pleased to see that they are reviewing this and that New York farmers will have the opportunity to provide fresh snacks for our school children.”

“City Harvest is pleased to learn that the USDA is taking another look at the language in the Farm Bill around de minimis processing, so that items like sliced fresh apples from New York State farms can be part of healthy school lunches.  Organizations that care about hunger and nutrition in New York City, and who care about improving school meals, have been asking for this change for some time,” said Jilly Stephens, Executive Director of City Harvest.

The Fresh Fruits and Vegetables Program in the 2008 Farm Bill authorizes schools to buy local produce that has not been processed for students to eat outside of school cafeteria programs. This program operates best when this local produce has been washed, sliced and bagged, since it is eaten outside of the lunchroom. Until now, the USDA interpretation of what it means for local produce to be considered “processed” has prevented local farms from participating.

In the Farm Bill’s Joint Explanatory Statement, the authors of the bill said the term “unprocessed” should not be taken literally, but rather “logically implemented” to allow the preparation necessary to deliver farm products “to a  school food authority in a usable form.”

In February, Senator Gillibrand teamed up with New York State Senator Aubertine, to ask the USDA to “…remain mindful of the vitality and value of New York's farms, the health of our school children, and the positive benefits of promoting local agriculture.”

In their letter, Senator Gillibrand and State Senator Aubertine stated that Farm to Fork programs create wealth and lead to increased employment through agriculture, “creating a ripple effect that strengthens our struggling rural communities. Additionally, locally grown and distributed food is likely to be fresher and more nutritious, a key to fighting childhood public health problems from obesity to diabetes.”

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.

The New York Senate will be in session tomorrow and Majority Leader Pedro Espada is apparently looking to score points with New York City labor unions -- he's calling for passage of what upstate legislators call "the farm death bill."

The bill, the Farmworkers Omnibus Labor Standards Bill, AB 1867, has already passed the Assembly.

If it becomes law, the bill will require farmers to pay time-and-a-half for over time, allow farm workers to join labor unions and require a day off during harvest season. It will also require farmers to pay into the unemployment system, among other provisions.

The bill is sponsored by Catherine Nolan, who represents Queens. Assemblyman Steve Hawley once pinned her down during a floor debate into admitting that in her district contains "less than one farm."

Sen. Mike Ranzenhofer plans to vote Nay if the bill does come to a vote. He said even upstate farm workers he's spoken with are concerned that passage of the bill will cost them their livelihoods.

"They are alarmed about the bill," Ranzenhofer said. "They're concerned about losing their jobs because farms will be going out of business."

Area farmers and farm workers alike tell both Hawley and Ranzenhofer that many of the issues the bill is trying to address is already taken care of by farmers. Most farmers do supply workers with adequate housing and health care. Workers are paid for all the hours they work, but not necessarily time-and-a-half. Because farm work is seasonal, the legislators note that a great deal of work must be packed into a short amount of time.

But by mandating such services, allowing labor unions to get involved and increasing government oversight, the bill will drive up costs on farmers tremendously.

The supporters of the bill just don't understand farming and that without farms, there is no food, both Hawley and Ranzenhofer say.

"The sponsors are from New York City," Ranzenhofer said. "They don't understand that the relationship between farmers and workers is mutually beneficial. This is a New York City union issue and really has nothing to do with farming in Upstate New York."

It's unclear just how the Senate will vote on the measure. It could go either way.

By Becky LeFevre

Summer is almost over! Labor day is approaching, school is about to start, and the cherries are in season. Cherries in season? Thanks to creative cultivating and new storage technologies, local farms really do have fresh cherries in season RIGHT NOW! Schwab Farm, located in Gasport NY, has been working with Cornell researchers this season on testing the effects of Modified Atmosphere Packaging on different varieties of sweet cherries. Modified Atmosphere Packaging, or MAP, is the technical term for plastic storage bags that extend the life of fresh produce by controlling the atmosphere (specifically the CO2 and O2 levels) inside the bag. Given a more controlled climate, produce stays fresher longer.   But, its not as easy at it sounds. Each type of produce, and each variety within each type, reacts differently to the MAP. At Schwab Farm, different varieties of sweet cherries are placed in MAP and the effects of the MAP are carefully studied to see which varieties of sweet cherries perform best in the new packaging. This current testing will help fruit growers in the future know which varieties to grow for use in MAP, so that the freshest sweet cherries can make it to market much later into the season.

Sharon Brent from Schwab Farms sells produce at the Genesee Country Farmers Market (located in the Batavia Downs parking lot on Park Rd.) every Tuesday and Friday, and hopes to have sweet cherries for sale until Labor Day. That is remarkable, considering the typical sweet cherry season in western New York ends around the first of August. In addition to the use of MAP, cherries are available from Schwab Farm because the farm grows a wide variety of cherries that mature at different times. While some varieties are done around Aug. 1^st, many other varieties continue to mature throughout the month of August. 

Cornell chose to specifically study the effects of MAP on sweet cherries for a few reasons. Cherries are becoming more popular due to recent discoveries of their health benefits. Cherries have powerful antioxidants, anti-inflammatory properties, and even the ability to reduce the risk of some types of cancer and Alzheimer’s. Unfortunately, sweet cherries have a very short shelf life, and here in the northeast we have a relatively short growing season. MAP can greatly help farmers meet the local demands for cherries. Instead of purchasing an alternative at the grocery store, local consumers can buy fresh produce from local farms much later into the season. This means our dollars stay in the local economy, and fruit we eat is as fresh and nutritious as possible.

With fresh cherries available later in the season, there may be a need for some fresh ideas on how to use them. Pick up some sweet cherries this week at the Genesee Country Farmers Market and try one of the quick recipes below.

Here's the verbatim testimony of Byron dairy farmer Robin Denniston-Keller given at the Senate hearing on the dairy industry held at GCC on Thursday.

It's titled "Legislative Responses to the Dairy Crisis: Reforming the Pricing Structure."

"...I am a proud American dairy farmer. My husband and I milk 100 Jersey cows and take care of another 100 young stock on our farm 10 minutes northeast of here in Byron, New York. It’s a privilege and honor to be asked to speak today.

"I’m not an economist or an expert on milk pricing, but I do feel I have common sense and a strong work ethic, which have served me well so far in life. I milk my own cows every day, and being up to my elbows in the results of lactation and excretion (generally not at the same time!) gives me a certain sense of reality!

"On our farm, our “pay price” for our milk produced in July 2009 was $13.26 per hundredweight. Put in consumer terms, $1.14 a gallon. This includes all protein and quality premiums received from Sorrento, the cheese plant we supply with pure, fresh Jersey milk. 

"Last year our July pay price was $24.23 per hundredweight, or $2.08 a gallon. I could spend my next three minutes ranting about the volatility and injustice of this, but that’s not constructive, and you can figure out on your own how I do the math to pay for our own health insurance, groceries, feed for the cows and calves, fuel for the tractors, hauling and fuel surcharge costs to send the milk to the processor, and the numerous other bills staring me in the face each month!

"Our 100-cow dairy benefits from the MILC program. We are at the perfect size to maximize our usage of the program. Our MILC government payments are currently a little more than 10% of our monthly income.

"Solutions to milk pricing issues -- please remember, as I said before, I’m not an economist or a milk pricing expert! Time heals all wounds, however, how do we stop the bleeding now?

Increase solid-non-fat fluid milk standards.

I like to call this the “No more blue skim milk” suggestion. Since 1962, California has had higher minimum standards for nonfat solids in fluid milk than the rest of the United States. Raising the United States standards to match the California standards will accomplish the following:

• Improve the nutrition benefits of milk. For example, California 2% milk has 21% more calcium than does 2% milk in other states. In addition, higher solids result in better tasting milk.
• Utilize more milk solids in consumer products and reduce the amount of nonfat dry milk produced for CCC purchase. This June, Dairy Farmers of America estimated that if the California Standards had been in effect for the rest of the U.S. during 2008, an additional 300 million pounds of milk solids would have been included in fluid milk sales. This represents more milk solids than were in all the CCC nonfat dry milk purchases through July 2009. California retail milk prices have remained competitive with, not higher than, the rest of the U.S.

Urge Agriculture Secretary Vilsack to have USDA purchase cheese for nutrition programs.

• This single action would accomplish several goals: Help to bolster milk prices and ease the current crisis faced by many dairy producers across the country; reduce outlays in dairy safety net programs (MILC payments and CCC purchases); and by donating the purchased cheese to food banks and other charitable organizations; USDA would be providing humanitarian nutrition services.

Cheese inventories are poised to be much higher than normal heading into this fall. This supply is weighing on the market and suppressing prices. A purchase of 100 million pounds of cheese would bring inventories more in line with past levels, and would bolster farm milk prices. Even a modest rise in milk prices would provide relief for dairy producers, reduce MILC expenditures, and lower CCC purchases of cheese.

Overhaul the dairy price discovery program.

I believe that our current milk-pricing structure is based on the trading of 2% of the cheese in this country on the Chicago Mercantile Exchange. This small amount of cheese determines my mailbox price. Or, in other words -- what the check I get in the mail says I will be paid for the product I’ve spent the last month getting covered in manure and other fine things to harvest!

This whole process goes against my good old common sense. Large milk processors were convicted for price manipulation as recently as 2006; clearly a more fair and broad based pricing mechanism is needed. We need a new set of tools in our milk-pricing toolbox. 

Sometimes I wonder why I am in a business where, I buy everything retail and sell my product wholesale, and the pricing mechanism is based on what I would call a “house of cards”? Way of life, being my own boss, pride of ownership, producing good food for an expanding world; they’re all good reasons. But if I’m not treated fairly, it’s time for me to wake up and find another life. I digress. Back to my suggestions.

Imports -- Charge promotion fees on imports.

United States dairymen contribute 15 cents for every hundredweight of milk we produce towards dairy promotion. I believe the new Farm Bill instructs USDA to charge importers
seven and a half cents for every hundredweight of dairy products imported. Dairy promotion basically helps create a larger market for dairy products. Importers benefit from that increased demand for dairy that our domestic producers have paid for, so it only seems fair to have importers contribute into the promotion program. 

At issue here is the fact that USDA has not implemented this fee, and it discourages me to see the lack of timeliness on legislation implemented into law. Seven and a half cents is not much, but I think charging importers this fee would decrease the amount of imported dairy products flooding our domestic market. 

I believe in fair trade, and I feel this fee charged to importers would somewhat level the playing field, and I’m encouraged that this promotion fee works for WTO reasons as well. 

Proceed with Extreme Caution before implementing Growth Management or Supply Management Programs.

While some producers and organizations are promoting growth management or supply management plans as a long-term solution to the dairy economy problems, I have some issues with these plans. Again, not an expert, and applying my common sense, I’m concerned that without solid knowledge of the impact of any such plans, I am not in favor of “jumping out of the frying pan and into the fire.”

Mandatory supply management goes against all my gut instincts, and my belief in the efficiency and productivity of the American Dairy Farmer. Last year’s high milk prices at the farm level resulted from a booming export market for American dairy products. We live in a global economy, and putting handcuffs on the American dairy industry with mandatory supply management seems to me to set us up for failure. We only have to look “across the pond” to see Europe struggling to get away from its quota system.

Finally, a sincere thank you to Senator Gillibrand and your staff for your efforts on increasing the MILC rates and indexing these payments for inflation. I am a proud American Dairy Farmer, and taking handouts does not please me, but this truly is a time of need for my fellow dairymen and me. Thank you for your efforts and your interest in the intricacies of dairy pricing. Thank you for listening to my suggestions, and I’m looking
forward to working together to resolve the dairy pricing issues we currently are facing and those in the future."

BATAVIA, NY -- About 200 people attended a formal Senate hearing this afternoon at Genesee Community College focused on a dairy industry in crisis and possible solutions.

New York Sen. Kirsten Gillibrand heard testimony from producers and processors, economists and dairy industry experts. At the end of the two-hour hearing, which started about a half hour late, she said she was taking some good ideas back to Washington to use in developing long-term fixes.

The dairy industry is hard hit by: a pricing structure that's based on only 2 percent of the industry's products: higher fuel and feed costs; trade inequities; the expense of meeting increased regulations and standards not required by international competitors; and by a swiftly fluctuating market -- stemming from changing demands, the impact of product perishibility and supply -- plus many other factors.

It's a tough business and it requires a certain youthfulness to do the heavy physical labor, 365-days-a-year, with a liklihood of losing money at the end of the year instead of making a profit.

One of the surest ways of increasing the health of the dairy industry, is to increase consumer demand for its products. Several spoke in favor of the federal government doing more to help out, such as buying more milk for school breakfast programs, stocking up food banks with cheese or buying powdered milk for women and infant nutrition programs. In other words, use more Department of Agriculture money going toward food purchases anyway to beef up dairy consumption.

To compete with a ever-increasing variety of thirst-quenching beverages, the dairy industry needs to develop new products and boost the flavor, "mouth feel," and nutrition of milk without adding fat or calories.

They also called for leveling the field when it comes to trade. Why does an American dairy farmer have to pay a 15-cent per-hundred-weight fee for marketing and promotion, when the foreign importer does not yet still enjoys the benefits?

One good way to boost oversees consumption is to sell more solid milk product, which is in great demand worldwide. But more production plants are needed. Yet a capital expansion program for Batavia has been on hold since 2005 pending USDA approvals.

Rep. Eric Massa said he'll enlist his colleagues to pressure the USDA to speed things up if Kim Pickard-Dudley drafts him a letter on why the capital expansion program is critical for Western New York. She spoke as a representative of the farmer-owned Upstate Niagara Co-op.

Robert Church advocated "market-driven solutions" and federalizing uniform industry standards, so states like California, do not have unfair advantage over Western New York's dairy industry. He's herd manager for Patterson Farms, a 980-cow operation west of Auburn.

"You said one-size-fits-all," Massa told Church. "My job is to protect New York. That's what I'm here to do."

The problems faced by New Mexico, California or Arizona dairies, compared to here, are vastly different because their circumstances are different, Massa said, about as different in fact as Mars is from Pluto.

"California cows are happy cows," so goes the marketing slogan, but Massa said here it's more like "New York cows are really angry cows."

A U.S. Senate hearing on dairy prices is scheduled Thursday at 2 p.m at GCC.

Sen. Kirsten Gillibrand, who is chairwoman of the Subcommittee on Domestic and Foreign Marketing, Inspection, and Plant & Animal Health, called the hearing to gather testimony on dairy prices and how government regulations impact pricing and what changes may need to be made.

This is a formal Senate hearing and only invited panelists will be given an opportunity to speak and ask questions, but any member of the public can attend the session. RSVP by contacting Gillibrand's office (see below). Also, anyone can submit written testimony to be included in the official record if received within five days of the hearing.

The panelists providing testimony represent producers, processors and economists.

A letter from Sen. Gillibrand's office lists the panelists:

Panel I – Producers and Processors
 
Barb Hanselman – Barb served on the local Farm Service Agency (FSA) committee and is a candidate for the state FSA committee. She owns a dairy farm in Delaware County and is actively involved in the farming community.
 
Robert Church – Robert is the herd manager of Patterson Farms, a 980 cow farm just west of Auburn, NY. The farm was the first in Cayuga County to complete a voluntary certification through the New York State Cattle Health Assurance Program.
 
Robin Keller – Robin and her husband, Kip, milk 100 cows in Byron, NY. She is the director for the New York Jersey Cattle Club and the President of the Genesee County Farm Bureau. She volunteers with the local 4H and Holstien clubs as well. 
 
Bruce Krupke – Bruce is the Executive Vice President of the Northeast Dairy Foods Association, which is a full-service trade association that includes processors, distributors, cheese and ice cream manufacturers, and producers.
 
Ron McCormick – Ron is a former representative on the National Dairy Board, which develops and administers a coordinated program of dairy promotion, research and nutrition education. They are funded by a 15-cent-per-hundredweight fee levied on all milk marketed commercially by producers.
 
Panel II – Economists and Experts
 
Dean Norton – Dean is a dairy farmer and agricultural consultant from Batavia, and was elected President of New York Farm Bureau in 2008.
 
Andrew Novakovic – Andrew is a professor at Cornell University who specializes in the economics of dairy markets. He is the director of the Cornell Program on Dairy Markets and Policy.
 
Bob Wellington – Bob has represented Agri-Mark at all Federal Order hearings since joining the cooperative in 1989. He serves as a member of the National Milk Producers Federation Federal Order and Price Support Committees and is a director and treasurer of the Council of Northeast Farmer Cooperatives.
 
Kim Pickard-Dudley – Upstate Niagara Co-op is a full-service dairy co-operative located in Western New York and owned by dairy farmers. They operate milk processing plants in Buffalo and Rochester and have a distribution center in Syracuse.

Members of the public who wish to provide testimony can do so in writing:

However, if you have written comments you would like to submit, feel free to bring them to the hearing, where they will be collected at the end, email to: dairyhearing@gillibrand.senate.gov or mail to our Rochester Office at Kenneth B. Keating Federal Office Building, 100 State Street, Room 4195, Rochester, NY 14614. If received within five days of the hearing, these comments will be submitted for the official record.

Gillibrand's office is asking  anybody who wishes to attend to RSVP:     

If you would like to attend the hearing, please RSVP to our Rochester regional office by calling (585) 263-6250 or sending an email to dairyhearing@gillibrand.senate.gov.

If local farmers are finding it harder to make a living, the cause may not be just a recession cycle.

The industry is changing, and in ways that appear not to be good for farmers, and may ultimately be bad for consumers.

The four largest grocery chains now control more than 36 percent of all food sales in the U.S., according to a GAO report. In 1982, the same chains controlled only 16 percent of the market. They are Wal-Mart, Kroger, Albertsons and Safeway.

At the same time, the share of the food dollar that goes to food producers has declined, and the gap between what consumers pay and what farmers receive has never been bigger.

The consolidation of retail chains has not yet led to higher prices for consumers, but that could change once the advantages of greater efficiency have been wrung out of the market place.

The Government Accountability Office said the gains in efficiency experienced by large firms may begin to diminish, “while market power could continue to increase,” the agency wrote. “In the retail sector, one expert expressed concerns about the effect on food prices in the future if food retailing becomes dominated by a handful of larger chains.”

Two experts counter that the increasing concentration in the food industry has already lowered prices paid to farmers, ranchers and dairy owners.

C. Robert Taylor, an ag economist at Auburn University, and Fred Stokes, executive director of the Organization for Competitive Markets, have asked the Department of Justice to examine this area of the economy for violations of antitrust laws, and it has agreed to open an inquiry.

Nobelhurst Farms in Pavilion runs enough cows to produce 5,000 gallons of milk a day. That many cows also produce a heck of a lot of manure.

Manure means methane and methane can be a pollutant, or it can be a source of power generation.

At Noblehurst, reports the D&C, the manure is being fed into a contraption that turns the methane into electricity.

Over the years, Noblehurst has had to work out some bugs with its digester, but now it is running smoothly and pumping out about 788,400 kilowatt-hours of power a year. On a typical day, manure is moved from 1,700 dairy cows toward the center of the main barn, where it is pushed into underground tubes that feed into a 28,000-gallon pit. The manure is mixed with effluent and pumped into a large digester tank. At the top of the tank, gas accumulates and powers a generator that produces electricity and gives off water and carbon dioxide. Every half hour or so, new manure feeds bacteria that produce the gas. A spout releases gas if too much pressure accumulates.

"That way we don't have a mess," said farm president John Noble.

Nationaly, about 100 suggest manure-to-electricity machines are in use, and 17 or so in New York. Noblehurst received a $250,000 state grant to help pay for the $1 million machine.

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.

In a press release, Sen. Kirsten Gillibrand is taking some credit for the USDA action, and she says:

“While this is great for New York’s dairy farmers, this is only a temporary solution to the fundamental problems with the dairy pricing system,” Senator Gillibrand said. “When I met with Secretary Vilsack on Wednesday, I made it clear that the current system is not working for New York dairy farmers – who have been pushed farther and farther toward bankruptcy. During these tough economic times, this increase will bring some much needed relief for our farmers.” 

Here's Lee's statement in support of the increase:

“While this is certainly good news and will provide some relief, Washington still needs to be doing more to support our dairy farmers,” Congressman Lee said. “Dairy is such an important economic driver in Western New York, but when you have milk prices declining rapidly, and the cost of feed and fuel going in the other direction, it makes it impossible for even the most experienced farmers to make ends meet.”  

Meanwhile, the Obama administration is apparently critical of the price-support program, saying in a report "the program has not demonstrated results."

Gillibrand says she has a three-point plan to help dairy farmers:

... including legislation to double the amount of money farmers receive from the MILC program, legislation to index the MILC rate to keep up with inflation, as well as plans to hold Senate hearings on dairy pricing both in Washington, D.C. and New York State.  

Gillibrand is not alone is seeking changes to the MILC program, according to the New York Times:

Several caucus members called for more federal action in the short term, including higher payment rates in the Milk Income Loss Contract subsidy.

"It still comes down to a supply-demand issue. We have a lot of supply, demand has decreased, exports are down, and we have mild temperatures here so cows are happy, at least in the Midwest, producing a lot of milk," said David Zaslavsky, a Chicago analyst with Downes-O'Neill.

Apparently, there's something to the cheese and milk marketing campaign in California: "California cows are happy cows." Temperate weather makes cows happy. And we always thought it was just a funny line. (Though, PETA never thought so.)

Additional information from Lee's PR:

New York is the nation’s third largest dairy state, generating $2.4 billion annually, more than half of the state’s total agricultural receipts. Wyoming is the state’s leading county for dairy production. Unfortunately, the economic crisis has had a significant impact on the dairy industry. For the first five months of 2009, the benchmark federal order average price was $11.59 per hundredweight, down 25 percent from the average of the previous five years. In June 2008, New York dairy farmers were paid $18.81 per hundredweight. Milk prices for June 2009 were expected to drop to around $11.40, while the latest USDA estimated cost of producing milk in New York is $25.27 per hundredweight. As a result, dairy farmers in Livingston County are projected to lose more than $23 million this year. In Wyoming County, dairy farmers are projected to lose $28 million, and in Genesee County, $60 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