Milk prices 'could double' if Congress fails to pass new farm bill

Reported by: Julie Tremmel

Videographer: B. DiGiovanni
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Updated: 10/02/2012 6:22 am

A bill designed to protect dairy farmers from the financial 'ups and downs' of the volatile business has expired, and farmers across the Capital Region are already bracing for the impact.

Milk producers say this tough economy makes it even more crucial for congress to come up with a plan soon.

And the New York Farm Bureau says if congress doesn't act soon, the expired bill could start to affect kitchens across the nation.

The Farm Bureau says without federal 'price support' for farmers a gallon of milk could spike from about three dollars per gallon, to about six dollars per gallon within just the next few months.

Steve Ammerman is the Manager of Public Affairs for the New York Farm Bureau.

He says the smaller dairy farmers will be the hardest hit by the expired farm bill, adding that many may even have to find a new way to make a living if something isn't done soon.

Farmer Tom Borden of O.A. Borden & Sons, Inc in Easton says caring for cows, and making milk costs big bucks these days.

"High grain prices is a big part of our dairy farmers problems of course that comes along with high fuel, those two go together. There's high grain, high feed, high fuel and high utility costs," Borden said.

But starting October 1st, the federal MILC money or 'Milk Income Loss Contract' cash set aside to help farmers bridge the gap between cost and revenue dried-up.

Ammerman said, "And any time milk prices are fairly low, and feed prices rise, this MILC program kicks in, and provides just a little bit of money. It could be anywhere between five to ten percent, it all depends on the farmer. That gives them just a little bit of money that helps them get through the market , and gives them incentive to stay in the business."

Ammerman added, "The price support system, their safety net, if you will that they've had in place for the past five years has been pulled out from under them as of yesterday."

And that means the nationwide milk pricing structure will be overhauled, going back to the system that was used years ago.

Ammerman said, "What will happen is that, if there's no farm bill, it will revert back to what's called 'permanent law' which is an antiquated milk pricing system that doesn't relate to the modern dairy industry. It would allow prices to be set on an unreasonable formula which would basically double the price of milk."

"They're not looking for a hand out, but at the same time, they do want a fair and reasonable price for what they produce," the New York Farm Bureau Spokesman said.

Borden agrees, the price of milk could soon be skyrocketing.

Borden said, "The price of milk would actually go way up. I think that's very bad for both the consumers and the farmers. That high of a price, I think, is going to hurt the consumer. The consumers aren't going to be so interested in eating and drinking milk, and dairy products because the price will be so high. And it's also bad, and it's also going to hurt farmers because we're not going to compete well in rural markets, and exports are very important, because we're not going to compete well, and we'll lose sales domestically."

Ammerman said, "You could be talking about six dollars to buy one gallon of milk in a grocery store and many people won't be capable of paying that, or simply won't be willing to pay that. So farmers aren't likely to be getting a higher milk price anyways, because how many people are really going to be buying milk at that price."

And Borden says no new bill means 'no farm' if something isn't done soon.

Borden said, "If it really went to that, I really hate to think about what that might mean. I would definitely go out of business. I think I'd look for some other enterprise to work on here, yeah."

Ammerman said, "They need lawmakers to pass 2012 Farm Bill. They need a new farm bill in place so they know moving forward, what the playing field is, what regulations will be in place, what safety net will be in place. And it's not just dairy farmers, it's all farmers, whether you're a vegetable grower or if you have an apple orchard, you want to know what the farm policy is in this country, because that helps you run your business in this country when you know what the rules and regulations are. We don't know if it will get to that point, we certainly hope it won't get to that point we hope the leaders in Congress you know, come to their senses if you will, and prevent that business impact from taking place."

Borden thinks the lack of action is all about politics.

He said, "I want the Congress to do their job. We need the farm bill. This should be above politics. The timing, just because we have a presidential election, we don't do anything? This should have been done it should have been done already. It's kind of a disgrace that they've put this aside."

Borden says, for farmers, those federal stop gap checks will stop arriving in November, and that's when the problems will officially start, unless something is done soon.

And just to give you an idea of the local impact, O.A.Borden & Sons, Inc. produces between 5 and 8 percent of the milk for Stewart's Shops, and Borden says his farm won't survive for long without help.

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kwkrnu72 - 1/7/2014 7:35 AM
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This is just stupid beyond all that's reasonable. Milk prices should be higher?!! You're kidding....and WHY should they be higher? Maybe because the government is subsidizing corn ethanol, which raises the price of corn to astronomical levels, so as to help out the dirt farmers. Which, also raises the price of land in the midwest, which subsequently raises the price of housing. So, they spend money to make corn more expensive, THEN, have to spend more money to subsidize other area's of the economy so that things don't get too expensive, thus creating an imbalance in the monetary system, making the money worth less, and then EVERYTHING costs more. Gubment...helping the crap outta ya...whether you like it or not.
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