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Does Washington really want to save small dairy farms?

Years ago, when Sen. Kirsten Gillibrand was still relatively new to her Senate seat and her seat on the Agricultural Committee, she came to Sullivan County to address dairy issues. She asked at the time, “The Federal government sets the price of milk; why wouldn’t it set the price of milk above the price of production?”

Dick Riseling, farmer and energy activist, addressed the issue at a meeting of the Senior Legislative Action Committee at the Sullivan County Government Center on June 2. He said the issue of small dairies was not one of economics but one of policy. The implication was that if politicians and officials in Washington, DC really wanted to save small family dairy farms they could find a way to do it. So far, however, the political will has not been there.

In fact, as just about everyone knows, federal policies for many decades have favored large dairy operations and processors over small dairy farms. In Sullivan County, NY, there were 46 small dairy farms in 2002. That number was 24 in 2012, and it’s now down to about 17. This comes at a time when each individual cow is producing more milk per year.

One reason for the continued disappearance of small dairy farms is that federal policy does not sufficiently reflect the enormous differences in costs between large and small farms.

A survey by Carl Zulauf of the Department of Agricultural, Environmental and Development Economics at Ohio State University in 2017 found the costs of production for large and small operations were quite disparate (tinyurl.com/y76u2rqh). It found that the 2016 cost of production of 100 pounds of milk at a dairy with 50 or fewer cows was $47, while the same cost at a farm with 100 cows or more was $21. At the moment, the price being paid to farmers, which is set by the federal government is said to be about $15, but the big boys are far better able to manage the rough periods than the modest operations.

Meanwhile, according to that same survey, 54% of dairy farms in the United States have 50 or fewer milking cows, while just 3% have more than 1,000 cows. If the powers that be are truly interested in protecting small family farms, they would likely need to consider the notion of adopting policies for small operations that are substantially different than policies for large operations.

Congressman John Faso has suggested that one way to address the small-dairy-farm issues is to improve the insurance programs available. He wrote in a press release several weeks ago, that “much-needed fixes to the Dairy Margin Protection Program and the Livestock Gross Margin-Dairy program” are being considered as part of the budget process in Washington, DC.”

Cindy Gieger, dairy farmer and former Sullivan County legislator, is not impressed with those programs. She wrote in an email recently, “My husband and I ‘opted out’ of the 2014 Margin Protection Program. We now understand that dairy farmers who ‘opted in’ paid far more in payments than were paid out and that this supposed ‘safety net’ program did not provide much relief to struggling dairy farmers.”

She added, “The real problem not addressed by this Dairy Margin Protection Program is current overproduction of milk across the country, which holds down the price paid to farmers. We feel a solution would be for Congress to create a milk supply management program that would include a federal milk pricing formula that includes farmers’ cost of production, which is at least $20 per hundred pounds. Currently, [the price paid] to farmers averages about $14, well below cost of production.

“Faso is like most that are disconnected with the very real plight of our dairy farmers. I, myself, saw few tangible efforts as I served my legislative term on the State Agricultural Taskforce. Tangible efforts that could immediately help farmers would be to allow whole milk back in the school lunch program, and prevent milk handlers from benefiting from increased ‘allowances’ which financially short dairy farmers. Congressman Faso should tap into efforts by various agricultural advocacy groups to pressure Congress to act on a cost of production formula.”

There are many suggestions regarding how to fix a system that has been forcing small dairy farms out of business for decades, but so far, Congress has shown no real desire for meaningful change. [See news story page 1.]

 

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