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‘Hangs hat’ on hearings for a new milk pricing structure
NFFC describes erosion in dairy community

Special for Farmshine

WASHINGTON, D.C. -- “We’re hanging our hat on language in the Senate version of the Farm Bill that asks the Secretary of Agriculture to hold hearings to consider a new milk pricing structure. We would just like to see that made mandatory,” said Arden Tewksbury of the Pennsylvania-based Progressive Agriculture and chairman of the dairy subcommittee of National Family Farm Coalition (NFFC).

NFFC held a press teleconference Tuesday, October 29 on the day before the House/Senate conference committee held its first public meeting on the 2013 Farm Bill.

In addition to Tewksbury, call participants were dairy producers Gretchen Main from New York, Joel Greeno from Wisconsin and Loren Lopes from California -- along with veterinarian Dr. Fetterman, who serves dairy producers in Bradford County, Pennsylvania.

Tewksbury chastised whomever has started the scare tactics in the news again about grocery store milk prices rising to $8 per gallon if the Farm Bill is not passed this month.

“There isn’t anything in any bill that is going to raise the milk price to our dairy farmers,” said Tewksbury. “What we do have is language in the Senate bill that strongly suggests the Secretary of Agriculture conduct hearings to look at a new price structure. NFFC and Pro Ag are trying to make that language mandatory in the conference committee.”

Tewksbury said NFFC is talking to Ranking Member Collin Peterson’s staff and House Ag Committee Chair Frank Lucas’ staff. “We also understand that Senator Patrick Leahy of Vermont is committed to it,” he said.

As for the scare tactics about $8 milk… Tewksbury took questions from mainstream media representatives on the call and notified them that he has written three editorials explaining the pricing formula under the parity provisions of the underlying 1949 law.

“It is nonsense to be talking about $8/gal. milk,” he said emphatically. “First of all, they won’t let the 1949 Act become law. And even if they did, I have proved that the $8/gal. milk claim is a fallacy. Every $1 price change per hundredweight, up or down, affects the per-gallon price in the store by 8.6 cents. Even if the 1949 Act were in play, it would take the store milk price only to $5.45 – at the most – and nowhere near $8/gal.”

Meanwhile, Tewksbury said NFFC is “hanging our hat on the only hope being Senator Gillibrand’s language to have a new pricing system and hearings for a new pricing system.”

Main also emphasized the need for a new pricing formula and her support for Congress to keep the Gillibrand language in the Farm Bill.

While NFFC favors what it calls a “standby supply management program along with a new pricing formula,” speakers on the call indicated their personal opposition to the stabilization program as written within the Senate version of the Dairy Title.

Greeno stressed his concern about “the extraction of wealth” from farms and consumers. “Every dollar that is vacuumed out of our farms and our rural communities and sent somewhere else continues the rapid process of consolidation, which has led to disaster. We don’t have enough farms left to put the necessary dollars into our rural communities.”

He cited statistics for his state showing that in 1986, Wisconsin had 45,000 operating dairy farms, while in 2013, that number is down to 9,900.

“The only way to put dollars back into rural communities is to be paid a living,” said Greeno. “The exodus of farms today is almost as bad as in the 1980s.”

California dairyman Loren Lopes talked about the impact on California dairy producers who are “trying to produce milk below the cost of production for five years.” He said California is losing six dairies per month, people are depressed as they are trying to get their bank loads, while rural businesses are unable to carry farmers on credit any longer.

“The milk price is set by global companies as they are setting commodity prices that are then converted to our milk checks on a per hundredweight basis,” said Lopes. “Without price reform, we are at the mercy of those companies with no bargaining power and having no ability to impact the price of the inputs we buy.

“Milk pricing has to be changed,” said Lopes, “or there will not be any dairy industry in California based on producers producing the milk.”

Dr. Fetterman talked about what he has witnessed over the past 23 years. “In 2001, I had 50 herds on regular herd checks every month; today I have 12. That’s income I no longer have. If the farmers no longer can make it, that affects me. It also affects the feed dealer, and my local hardware store. (A poor pricing formula) does not just affect farmers, it affects everyone around them. I don’t see the confidence in the future by the next generation. Things will be bad here in the next 20 years if something is not done soon.”

NFFC also noted the widening gap in the ratio between the price consumers pay at the store for milk and dairy products and the price farmers receive on the farm for the milk they produce.

When asked their position on the Dairy Security Act versus the Goodlatte-Scott amendment, NFFC press conference participants did not pick sides, except to say that margin insurance in both programs is not the answer because a change in the pricing formula is needed.

“But I will say, as a dairy farmer, I would never agree to supply management unless it comes with a guarantee to cover our costs,” said Tewksbury. “The Dairy Security Act stabilization program would be a yoke around the neck of producers and serves only to force producers to buy more insurance from the government.”