About two dozen representatives from government and most sectors of the dairy industry met in Washington, D.C., on Wednesday to discuss the current milk-price crisis, agreeing that farmers mired in debt need immediate assistance, but that the work must continue on a long-term solution to the imbalance between production costs and selling prices.
“We can’t let the momentum slow down this time,” said Bob Gray of Northeast Dairy Cooperatives, referencing failed efforts to address the issue in the 2008 Farm Bill. “When prices improve, we tend to forget … and we can’t let that happen again.”
He suggested that increasing the price paid by the federal Dairy Product Price Support Program could increase the “blend price” farmers receive by perhaps $2 per unit. The support program created in the Farm Bill buys up leftover milk from commodities markets.
With farmers receiving between $10 and $13 per unit of milk, the increased payment would be significant. But Jim Miller, the U.S. Department of Agriculture’s undersecretary for farm services, said at least $32 million would need to be found to pay for the increase, and he questioned whether the department would be able to unilaterally make that transfer.
Miller said the USDA has purchased 272 million pounds of nonfat dry milk and expects to buy up to another 50 million more by the end of the year. However, he warned that when prices eventually rise, the government will sell off its stored supply and likely depress prices. “There’s some negatives associated with this program down the road, as well,” he said.
Arden Tewksbury, a Wyoming County dairyman who helped write the dairy price-stabilization bill U.S. Sens. Arlen Specter, D-Philadelphia, and Bob Casey, D-Scranton, have introduced, argued for the bill, saying it would both link farmers’ payments to their costs and create an economic disincentive to overproduce.
He was more concerned, however, with imports of milk-protein concentrates, casein and other milk derivatives used in dairy products. The imports have added to the domestic oversupply and reduced demand. Miller said that market is volatile just like milk and that his agency expects a reduction in demand.
The state Farm Bureau, which had several representatives at the meeting, has expressed reservations about increasing prices without controlling supply. Setting a price without controlling supply could simply lead dairy farmers to produce more milk and create even great oversupply, bureau spokesman Mark O’Neill said after the meeting. “On the surface (increasing prices) sounds great, but in the real world, would it work?” he asked.