By DARRIN YOUKER
NEW YORK — New York Sen. Kirsten Gillibrand has introduced legislation to help beleaguered dairy farmers improve their bottom line. And at the same time, the National Milk Producers Federation, representing farmers and cooperatives, is also making a renewed push to reform the Federal Milk Marketing Order.
Gillibrand, New York’s junior senator, recently introduced legislation that would bolster the MILC program and increase transparency in the market. Gillibrand said she is pushing for reforms to the milk pricing system because New York State has lost a number of dairy farms.
Between 2002 and 2007, New York lost 23 percent of its dairy farms, Gillibrand said. There are now 5,700 dairy farms, down from nearly 7,400, she said.
“New York is home to the hardest working farm families and the finest dairy products in the world, but outdated regulations, broken pricing structures and a bad economy are hurting our dairy farmers and farming communities across the state,” Gillibrand said in a prepared statement.
“We need to act now to support New York’s dairy farms.”
Gillibrand’s five part reform plan calls for:
Prevention of cuts to the MILC program, which is set to take effect in September 2012. The program represents an important safety net for farmers, Gillibrand said.
Urging the USDA to collect data on alternative dairy pricing measures. The current end-product pricing has led to volatility in the prices farmers receive, Gillibrand said.
Reducing somatic cell counts, which will lead to better quality milk.
Requiring cold storage inventory reporting.
Increasing transparency by requiring dairy cooperatives that engage in bloc voting to provide members written notices when certain votes occur.
While dairy farmers appreciate the work that Gillibrand has done, there is still a need to tie the price of milk to cost of production, said Arden Tewksbury, manager of the Progressive Agriculture Organization.
“What is wrong with a dairy farmer getting a bill that covers their price of production?” he said.
David Fitch, a dairy farmer from Herkimer County, said he and other producers are growing tired of inaction by congress on making substantive changes to dairy policy.
“Our senators and congressman needed to do something yesterday to help the farmers of this nation,” he said.
Rural economies in New York are driven by agriculture, so the continual poor milk prices have a ripple effect throughout much of the state, Fitch said. Producing milk in New York costs around $25 per hundredweight, yet farmers last month were getting $18, he said. As a result, farmers have burned through their savings, and extended their credit, to the maximum.
“Farmers need more of the retail dollar that is already there,” he said. “We have to be able to get more for what it costs us to produce.”
Recently, the National Milk Producers Federation announced its efforts to push for legislation to reform the milk marketing order and bring more dollars into the hands of farmers.
The approach differs from the one supported by Gillibrand, said Chris Galen, spokesman for the NMPF. The organization’s proposal calls for the elimination of two of the four classifications of milk and replaces the end product pricing formula with a competitive milk pricing system. It also maintains current regional differentials for Class I prices.
This approach acknowledges that a farmer’s input costs have risen, and provides a way to deal with it, Galen said.
“I think that is the value to this approach, and it takes into account the cost of production,” Galen said. “If you get into the system where every farmer’s cost of production has to be met, it gets to become politically non-saleable.”
As well, instead of expanding MILC payments, the NMPF approach would allow those payments to expire and instead move to a margin protection program, Galen said.
Most importantly, reducing the number of milk classes will reduce price volatility and allow co-ops to charge more to processors, Galen said. Doing so will allow the industry to move away from the end-product pricing system, he said.
“It would make the whole process simpler,” he said.
The NMPF is now starting to reach out for lawmakers to support the plan, Galen said. But an equally important step will be to show lawmakers that dairy farmers are unified in their quest for reform.
“We have to get consensus among our community,” he said. “We have to work in lockstep.”