New York's Democratic senators took steps in Washington, D.C., on Wednesday to reverse the plight of dairy farmers.
Sen. Charles Schumer introduced a bill to close a loophole that allows importers to avoid tariffs on products with milk-protein concentrate.
And Sen. Kirsten Gillibrand called on the U.S. Department of Agriculture to follow 2008 Farm Bill parameters when forming a dairy-pricing advisory group.
"Plummeting milk prices combined with rising costs of production have been devastating for dairy farmers across New York," said Gillibrand, the first New York senator in nearly 40 years to serve on the Senate Agriculture Committee.
She worked on the 2008 Farm Bill as a former member of the House of Representatives to establish the Federal Milk Marketing Order Review Commission to review issues surrounding milk pricing and dairy competitiveness. However, the USDA recently announced plans to create a dairy-pricing advisory group instead of the commission, and Gillibrand urged the USDA to ensure that the structure for the commission is applied when creating the advisory group.
``While creating an advisory group at the USDA is a positive step, we must ensure that we get to the bottom of this broken system and find a way to fix it," Gillibrand said. "The current system is clearly not working for dairy farmers in New York.''
Area farmer proposes ban
Milk pricing, MPC and tariffs aren't new issues. But rising expenses and dropping revenues put the industry into a crisis, Schumer and Gillibrand said in separate media releases Wednesday. The Democratic senators' outreach came a day after some Otsego and Delaware farmers joined others for a bus ride to Washington, D.C., to rally lawmakers for help.
``It's a dire situation,'' said Judy Tompkins, a West Laurens farmer with 250 dairy cows, including 125 milkers. Tompkins said that in Washington, she heard stories of farmers living on ``a margin,'' with some taking steps such as selling property to stay in business.
An tariff equity bill would have to impose a huge fee on MPCs to level the playing field, Tompkins said. Instead, a ban on such imports is needed to protect the integrity of U.S. dairy products and to safeguard consumers from foods that have additives and aren't properly labeled, she said.
And the debate over whether a commission or advisory group reviews dairy issues isn't going to be resolved quickly enough to address the problems and help farmers, she said.
``Things are desperate,'' Tompkins said.
Legislation targets foreign MPC
Schumer's legislation, The Milk Import Tariff Equity Act, would close a loophole that allows unlimited importation of foreign MPC for use in food. As a result, MPC imports have more than doubled during the past decade, Schumer said, which undermines the market for domestic powdered milk, thus reducing the farm price for milk and costing New York dairy farmers millions every year.
MPCs are derived from milk and used in a variety of both food and non-food related industries.
Congress has discussed raising tariffs on milk-protein ingredients many times in years past, often causing heated debate on Capitol Hill, but legislation to impose duties on dairy proteins hasn't moved beyond Senate and House committees, said the International Dairy Foods Association in Washington, D.C., on its website.
The IDFA applauded the Senate Finance Committee in 2007 for defeating an amendment to impose milk-protein tariffs, which the association said were unnecessary trade protectionism. IDFA represents the nation's dairy manufacturing and marketing industries and their suppliers, and has a membership of 530 companies representing a multibillion-dollar industry.
Schumer said milk prices were higher when the act was considered most recently, and it's time the legislation be pushed through.
"For too long, our farmers have been getting hammered on all sides," Schumer said in a media release and during a conference call. "If it isn't weather problems, it's the USDA's failure to provide adequate aid to farmers during market crisis. If it isn't problems with harvests, it's ill-written trade agreements that allow importers to circumvent the intent of our trade rules.''
Some producers in countries including New Zealand, Australia and Canada and some European countries also mix small amounts of milk protein with powdered dry milk, to avoid existing tariff rate quotas on powdered milk, Schumer said.
Current tariff rate quotas on dairy products went into effect in 1995 after the Uruguay Round of World Trade Organization negotiations, when milk by-products such as MPC, casein and caseinates weren't widely used in making dairy products.
According to the National Milk Producers Federation, 27,800 metric tons of MPCs, valued at $108.7 million, were imported during 2004-07, Schumer said.
``Using MPCs to bypass our dairy trade regime has got to stop now," he said.
Schumer said if MPCs were produced domestically, the additional share in the Southern Tier, which has 85,400 milk cows, of the domestic dry milk market would be about $990,000 annually.
Milk Income Loss Contract also examined
Schumer said he also is co-sponsoring legislation to increase Milk Income Loss Contract reimbursement rates to 90 percent, and said he would meet with U.S. Secretary of Agriculture Tom Vilsack on Wednesday to continue pushing for at least a 5 percent increase in prices through the Dairy Product Price Support Program.
According to Farm Credit, it costs dairy farmers $17.58 to produce a hundredweight of milk, Gillibrand said in her media release. The market is only paying $13.33 per hundredweight. The MILC program was designed to be a safety net but farmers aren't receiving enough income to cover the costs of staying in business, she said.
Under the Farm Bill, the USDA secretary was directed to establish a Federal Milk Marketing Order Review Commission, which would conduct an evaluation of milk marketing order systems.
Gillibrand said the commission was to include one member representing a national consumer organization; four from land-grant universities; one from the food and beverage retail sector; four dairy producers and four dairy processors, appointed to balance geographical distribution of milk production and dairy processing.
In a letter to Vilsack, Gillibrand wrote, "Emulating this composition with the dairy advisory group would make certain that all important segments of the dairy industry are adequately represented in the important assessments and recommendations made regarding milk pricing."
