Action by the secretary of agriculture on Friday will help area dairy farmers get a better price for their milk, several farmers and officials said. But producers and legislators said that it was a first step in addressing the pricing problems.
The prices paid to dairy farmers through the Dairy Product Support Program will be raised by Department of Agriculture Secretary Tom Vilsack, effective August through October 2009, according to a press release from the agency.
The agency estimates that these changes will increase dairy farmers' revenue by $243 million. A spokesman with the USDA, Caleb Weaver, did not have an estimate of how the increases would affect actual milk prices paid to farmers. He did say that it would help to decrease supply by purchasing an additional 150 million pounds of nonfat dry milk and 75 million pounds of cheese.
The increases paid for dairy products are: nonfat dry milk _ from $0.80 per pound to $0.92 per pound; cheddar-block payments will increase from $1.13 to $1.31 per pound and the price of cheddar barrels will go up from $1.10 to $1.28 per pound.
Farmers received about $12 for a hundred pounds of milk in June, according to the USDA's website. This is down from $19.56 a year ago. The cost of production, not including labor and return on equity, is approximately $15-$17 a hundredweight, officials said.
"We've been monitoring the situation, and this was something we were able to do now," Weaver said about the increases. The agency is projecting pricing improvements, but more action could be taken if needed.
Sens. Charles Schumer and Kirsten Gillibrand, both Democrats representing New York, were among those who urged the action as part of a plan to address low prices recently, according to press releases.
A delegation of area farmers lobbied for action on Wednesday. Weaver did not say if those efforts resulted in the move now.
Several farmers who went to Washington, D.C., expressed their appreciation for the work of their representatives. They all agreed that more needs to be done to manage the milk supply as a way of having prices better reflect the cost of production.
Bloomville dairy farmer Terri Holdridge said, "It's a step in the right direction."
She said she did not know if the move came about as the result of the trip, but "it seems to have resulted in actions that have been favorable."
But with milk prices below the cost of production _ she said she estimated at about $16 _ "you borrow a little and cut where you can to get through these times."
With about 40 registered Holsteins, Holdridge said her farm loses about $100 a month for each cow.
Hobart dairy farmer David Post said the support of legislators was "very much appreciated by us.
"I think they took steps to contact Vilsack," he said.
The increases will help some, but "we need supply management" to address the issue, he said. His farm milks about 70 Holsteins, he said.
"This is good news," said Cornell Cooperative Extension of Delaware County educator Marian Kiraly about the increases. She went on the D.C. trip in an advisory role. Kiraly said it will help bring prices closer the cost of production while a more long-term solution is sought.
West Laurens dairy farmer Judy Tompkins, whose farm milks 125 Holstein, said "I believe we have been heard" by this move.
It is a step in a more comprehensive solution that would include supply management, she said. Farmers are also looking to state lawmakers to help with the situation.
Along those lines, Sen. James Seward, R-Milford, and Assemblyman Peter Lopez, R-Schoharie, wrote to Gov. David Paterson on Friday, asking him to use a minimum of $60 million from federal stimulus funds to assist dairy farmers struggling with record-low dairy prices.
"I am encouraged by federal proposals under consideration to fix the archaic milk pricing system, but if we don't take action now, many of our farmers wouldn't be around to experience the changes," Seward wrote.
"This won't solve the problem," said Schumer in a press release about the increases, but "it will certainly help" while other action is taken.
Gillibrand said while this was only a temporary fix, it will bring "some needed relief." Earlier this month, she unveiled a three-point plan, including doubling the amount farmers receive from a national dairy support program and holding Senate hearings on dairy pricing.
