Email
Print
Dairy farmers await relief from Congress
Photo by Regan Hill
ADVERTISEMENT
Published: October 4, 2009
After struggling for months to offset the effects of low milk prices and the saturation of the dairy market, area dairy farmers might get some relief soon.
Part of the final $23.3 billion agriculture appropriations bill currently passed between the U.S. House and Senate is a $350 million emergency aid package aimed at helping struggling dairy farmers.
An estimated $60 million will go toward purchasing dairy products and cheese, and the remaining $290 million is expected to be distributed in some form of direct payments to farmers.
It is unclear how the money will by distributed, but U.S. Secretary of Agriculture Tom Vilsack will come up with the guidelines.
Aaron Groen, the spokesman for 5th District U.S. Rep. Virginia Foxx, said the appropriations bill is in conference right now, but is expected to be up for a final vote sometime this week.
"It is something that is badly needed if our industry is able to survive," said Iredell County Extension Director Ken Vaughn. "It's very critical."
Iredell's 52 dairies and those around the country have encountered considerable hardships since the beginning of the year when prices dropped drastically due to the saturation of milk in the market.
Taylorsville dairy farmer Myles Payne said most dairymen would rather not take a handout. They'd rather make their living on their own, he said. However, price of milk per 100 weight continued to fall below the average production cost.
Prices hit the $12 to $13 range this year, well below the accepted industry norm of $16 per 100 pounds to produce, Payne said.
To continue producing milk for the population, dairymen will need some sort of government intervention.
How much the money is needed to help will depend on each farmer's situation, he said. How big is their debt load? How efficient is their operation?
"Nobody is making any money right now," Payne said. "We are just trying to get through this low-price cycle until the price turns around."
In the past, many local farmers said they've cut back on making sizable purchases to help with the production of their farms. Vaughn said a few farmers have sold their herds. He doesn't know how much longer others they can hold on if things don't improve.
N.C. Farm Bureau Director of livestock programs Chester Lowder said the money will help dairy farmers, but it's not a cure for the plight they find themselves in.
"They've been operating at a loss easily since the first of the year," he said.
It is not clear how much of the $290 million North Carolina farmers will receive. The state is 29th in the country in terms of milk production, which could affect its appropriations, Lowder said.
Lowder said the aid package coupled with programs, such as the Cooperatives Working Together program to purchase herds out of production and the Milk Income Loss Contract (MILC), might help farmers.
Lowder said some farmers went through the Milk Income Loss Contract, which provides payments to farmers when prices fall, but benefits are capped after the first three million gallons of milk are produced — a a matter of months.
According to the Associated Press, Appropriations Committee Chairman David Obey, D-Wis, wants to dedicate the $290 million toward MILC payments.
Lowder said farmers have to try to settle expenses related to increased fuel prices, feed, fertilizer and monthly machinery maintenance. A lot of them had to borrow money.
Rocky Creek Dairy owner Ben Shelton said he doesn't believe the funds will help the market situation.
However, he said, if everyone drank about a pint of milk more every day, the supply would go down.
"To some extent, you just continue the agony," Shelton said. "You have to get milk off the market to make a difference for the long term."
Shelton said the dairy industry is on target to lose anywhere from $7 billion to $9 billion this year. Some farmers in the western portion of the country are losing $100 per cow every month. Around here, some dairymen are losing $50 per cow.
If all 60,000 dairy farms in the U.S. get an equal portion of the pie, each will receive around $4,833 to $5,000, Shelton said. That is barely a drop in the bucket to what they owe, he said.
"Nobody is going to turn that down, that is for sure," he said. "It sounds great, that is a lot of money, but I don't think it will make a difference."
Email
Print
ADVERTISEMENT
Advertisement
