Gillibrand offers multi-point plan to help dairy farmers

Saying solutions to the state's dairy crisis can't wait until the 2012 Farm Bill, Sen. Kirsten Gillibrand today unveiled a comprehensive plan she claims will provide farmers with immediate support.

That can't happen soon enough according to those in the industry. New York State lost nearly a quarter of all its dairies during 2002-07, according to information Gillibrand included in her news release, dropping from nearly 7,400 to about 5,700 five years later.

The number of Genesee County dairies dropped from 98 to 68, a 31-percent decline.

“New York is home to the hardest working farm families and the finest dairy products in the world, but outdated regulations, broken pricing structures and a bad economy are hurting our dairy farmers, and farming communities across the state," Gillibrand said. "We need to act now to support New York’s dairy farms.”

The full specter of the problem was gleaned after the senator held six agricultural "listening sessions" statewide in preparation for next's year farm legislation.

"I appreciate the senator taking the the time to have listening sessions for the dairy industry and for trying to help New York dairy farmers," said Dean Norton, an Elba dairy farmer and president of the New York Farm Bureau. "I look forward to working with her in preparation for the 2012 Farm Bill."

Gillibrand's plan intends to: make dairy pricing more competitive for New York producers; prevent cuts to the MILC program; help boost exports; improve storage reporting standards; and increase trading price stability.

The current pricing system is obscure and the discouraging result often means dairy farmers pay more to produce their products than they get from selling them.

Farmers say the high costs of feed and fuel make even the existing safety net -- Milk Income Loss Contract (MILC) -- inadequate. Further cuts would increase the numbers of farmers taking on massive debt to cover their costs or go out of business.

Gillibrand is urging the federal Department of Agriculture to collect and publish data on alternative measures of dairy pricing, such as competitive-pay pricing, "so that everyone can see if this would be a better way to price milk." The current system of end-product pricing has reportedly contributed to more volatility in milk prices for producers.

Under a competitive-pricing scenario, the price of milk would be determined by a survey of prices paid to farmers for the milk used in cheese production in a competitive market wherein there are counties with at least five different milk buyers.

New York is one of only three states with competitive counties today.

In noncompetitive areas, the existing Federal Milk Marketing Order (FMMO) system would take effect, however base prices would still be established by the competitive-pay pricing system.

To both improve America's milk quality and boost exports, the senator wants to lower the most basic measure of milk quality -- known as somatic cell counts -- so milk has "a longer shelf life, better taste and greater cheese yield."

Another area needing reform, according to farmers are the inventory methods for certain types of cheese, which can "significantly influence trading activities on the Chicago Merchantile Exchange."

For example, cold storage facilities are not required to report their inventories of dairy products to the USDA Natural Agricultural Statistics Service (NASS), and only do so on a voluntary basis. This purportedly creates an environment of volatility and uncertainty for dairy trading.

Senator Gillibrand is introducing legislation that would make the Cold Storage Report to NASS mandatory, and give the USDA authority to audit warehouse inventories to help bring more stability to dairy trading prices.

She is also introducing the "Democracy for Dairy Producers Act," which would require dairy cooperatives that engage in bloc voting to provide their member farmers with written notices and other information when certain kind of votes occur.

The bill also would establish an information clearinghouse to provide information regarding any proposed milk marketing order reforms. The information would have to be published on a Web site and distributed to producers through a fax list, e-mail distribution list, or U.S. mail list, at the discretion of individual producers.