Sen. Kirsten Gillibrand to introduce bill to reform dairy pricing

Sen. Kirsten Gillibrand to introduce bill to reform dairy pricing
Sen. Gillibrand (D-NY) and Sen. Collins (R-ME)are introducing the Dairy Pricing Reform Act to set a higher floor for the Farm Bill's proposed dairy margin insurance.

Apr 2, 2013
Written by: Diana Louise Carter, Staff writer
Link to Democrat and Chronicle Article

If dairy pricing remains the way it is now, small dairy farms across New York state will be hardest hit, according to U.S. Sen. Kirsten Gillibrand.

“There’s something wrong with dairy pricing in this country,” the New York Democrat said Tuesday in a phone conference about the bill she and Sen. Susan Collins, R-Maine, are introducing next week. Their Dairy Pricing Reform Act is one of several pieces of legislation Gillibrand is promoting in anticipation of a new Farm Bill.

Last year the Senate passed a five-year Farm Bill, but the House balked.

Gillibrand is suggesting setting a higher floor for the Farm Bill’s proposed dairy margin insurance. The Farm Bill proposes farmers receive federal insurance payments when the difference between the price they get for 100 pounds of milk and their costs for producing that amount is $4.50 or less. Farmers can buy additional insurance to raise the floor. But Gillibrand wants to the floor to start at $6.50 for farms with 200 or fewer milking cows, or for the first 200 cows of larger farms.

In addition, Gillibrand suggests exempting farms of fewer than 200 cows from federal herd reduction requirements when the national milk supply is too large. If adopted, that exemption would favor New York, where farms aren’t meeting the state’s demands for milk, which are only expected to grow as more yogurt plants come on line.

Over the last several years, the pricing formula and escalating costs of feed and fuel have created an ultra-slim margin for New York farmers; one year costs outpaced earnings. The trend has prompted industry outcry to revamp the pricing schedule. But relief in the form of a new Farm Bill hasn’t come.

“This kind of delay comes as major cost for our farms, particularly dairy farms,” Gillibrand said. It also tends to favor consolidation of dairy farms, a trend that will drive more New York dairy farms out of business, she said.

“The flawed dairy policy is forcing dairy farms to go out of business at an astonishing rate,” Gillibrand said. Even as yogurt production has risen and promises to be a great boon to New York farmers, the state lost 65,000 cows in the last decade, Gillibrand said. The Finger Lakes region, including Rochester, was the only region to gain cows, with an increase of 12,900 cows between 2002 and 2012.

“The price of milk at the store has continued to rise from 1970 to today,” Gillibrand said. “The price of milk paid to the farmer has largely been stagnant.”

Julie Suarez, director of public policy at New York Farm Bureau, couldn’t comment directly on Gillibrand’s bill because she hadn’t had time to review it. But she shared Gillibrand’s concerns over delays in getting a Farm Bill.

“We really need a long-term Farm Bill that provides some certainty over critical crop insurance tools, including the newer concept of dairy margin insurance, that allows farmers to better manage the risks of farming in a way that allows for the continuation of the family farm but without a government bailout,” Suarez said.

“We look forward to continuing to work with Senator Gillibrand to get a comprehensive Farm Bill done, for all of New York’s local farmers,” Suarez said.

DCARTER@DemocratandChronicle.com
Twitter.com/DianaLCarter