DAIRY FARMERS URGE EMERGENCY MEASURES IN STIMULUS PACKAGE

IMMEDIATE RELEASE
Contact: Katherine Ozer (202) 543-5675 Cell: (202) 421-4544
 
DAIRY FARMERS URGE EMERGENCY MEASURES IN STIMULUS PACKAGE

Milk Price Collapse Leaves Dairy Farmers Confronting Greatest Crisis Since
the Depression

 
Washington D.C. (January 29, 2009) – With dairy prices collapsing by over
$5 for February, one of the largest drops in 50 years, dairy farmers are
confronting their worst crisis since the Great Depression. The Dairy
Subcommittee of the National Family Farm Coalition, representing dairy
farmers from across the country, today sent an urgent letter to Congress
asking for emergency measures to be taken in the economic stimulus package
and to ensure some of the benefits go to rural America. Paul Rozwadowski, a
Wisconsin dairy farmer and chair of the NFFC Dairy Subcommittee, said,
"NFFC for over a year and during the entire Farm Bill debate warned we were
in a crisis in the dairy industry. These are the worst economic conditions
we have ever faced and they are impacting all farmers, whether you milk 50
or 5,000 cows. It is unconscionable for dairy farmers to have to suffer
through these low milk prices and we hope Congress can take immediate steps
to rectify
 the situation. Otherwise, we could soon become dependent on Chinese milk
powder for our dairy needs."
 
The letter to Congress suggests 1.) an emergency $17.50 cwt floor price 2.)
At least a $3 per cwt differential on all Class I milk (bottled milk) 3.)
inventory management that does not rely on ineffective "voluntary herd
buyouts." The cost could be offset by a small assessment on all dairy
farmers.
 
These are temporary measures that are needed to stabilize extremely
volatile milk prices and help farmers grappling with high fuel, feed and
transportation costs. If Congress refuses to enact any of the previous
measures, then NFFC requests that immediate action be taken to provide
dairy farmers' some of their lost income through an increase in the MILC
payments. With the kind of catastrophic losses we are experiencing, farmers
need a MILC payment that reflects 100% of the difference between USDA's
national cost of production [$20.90/2007] and the pay price dairy farmers
are projected to receive for their milk. Brenda Cochran, a Pennsylvania
dairy farmer, said, "Dairy farmers have never liked the MILC program or
relying on taxpayer subsidies when we believe the processors should be the
ones to pay a fair price to farmers. Increasing MILC payments would be an
emergency short term solution – a band aid – to help stop the hemorrhaging
of our nation's
 dairy farms, but it is NOT the solution to the problem of a failed federal
pricing system."
 
In the long-run, NFFC believes the milk pricing system must be reformed and
decoupled from the Chicago Mercantile Exchange and begin to address rampant
anti-competitive behavior on the part of the few cooperatives and
processors who control most of the industry. Arden Tewksbury, a
Pennsylvania dairy farmer and head of Progressive Agriculture, said, "The
recent $12 million fine by the Commodities Future Trading Commission (CFTC)
against Dairy Farmers of America (DFA), the nation's largest dairy
cooperative, for price fixing shows how easily manipulated the CME is by
our dairy cooperatives, processors and food companies. Dairy farmers need
to be asking why prices are crashing and who is behind this since supply
and demand have long ceased to function properly in our industry."
 
In 2007, Senators Bob Casey (D-PA) and Arlen Specter (R-PA) introduced S.
1722, which would have priced milk based on a national average cost of
production with an inventory management program to deal with overproduction
if necessary. NFFC believes a new pricing system, along with action by  the
Department of Justice on their ongoing anti-trust case against a few of the
nation's leading dairy cooperatives and processors, are the long-term
solutions needed to ensure America has a thriving dairy industry.
 
Loren Lopes, a California dairy farmer, said, "This catastrophe is hitting
all farmers, regardless of region. In California, we are already hearing of
farmer suicides. We need real solutions that address our broken pricing
system. We do not need morally dubious herd retirement programs that other
farm groups have pushed that do nothing to address stable prices for
farmers."
 

NFFC believes immediate action is essential before our dairy economy is
completely overwhelmed by bankruptcy. The crisis is not only impacting
farmers, but agribusinesses, processors, banks, veterinarians and others
who make up rural economies. It is urgent for our nation's food security to
ensure the survival of our 60,000 remaining dairy farmers. NFFC believes
that rural America and our nation's food supply are important enough for
consideration in any stimulus package.       
                                                          

 
 
The National Family Farm Coalition (NFFC), founded in 1986, provides a
voice for grassroots groups on farm, food, trade and rural economic issues
to ensure fair prices for family farmers, safe and healthy food, and
vibrant, environmentally sound rural communities here and around the
world.  For further information about the organization, call 1-800-639-3276
or visit www.nffc.net.