Congressman Murphy Unveils Two-Step Initiative To Combat Economic Challenges Facing Dairy Farmers
Press Release
On Saturday, Congressman Scott Murphy unveiled a two-step initiative to combat economic challenges facing dairy farmers. New York is the third largest milk producing state in the nation, and with milk prices plummeting, Congressman Murphy recognizes that immediate action must be taken to both provide immediate relief to struggling dairy farmers, and stabilize the dairy market for the future.
"Dairy farmers are vital to the Upstate economy and community, and during these difficult times have struggled to make ends meet," said Rep. Murphy. "This proposal works two-fold, by providing immediate relief to our struggling dairy farmers today, and stabilizing the dairy industry for tomorrow. Before more small farmers are forced out of business, we need to bring fast relief and stability to the industry."
After experiencing record milk prices in 2007 ($21.70 per cwt) and strong prices in 2008 ($18.41 per cwt), milk prices have fallen to less than $12.00 per cwt in the first five months of 2009. In fact, USDA projects that the all-milk price will decline to an average $12.15 per cwt in 2009the lowest average annual price received by farmers for milk since 1979. In New York State alone, producers are likely to see revenues plummet by over $650 million in 2009.
In an effort to provide both short-term relief and stability to the U.S. dairy industry, Congressman Murphy has proposed a two-step strategy to provide much-needed support to dairy farmers, while working to balance the market, including:
1. Providing an immediate and retroactive increase in the MILC safety net program.
The Murphy proposal would double the payment rate from 45 percent to 90 percent for the period beginning on March 1, 2009 through November 30, 2009. Currently, participating dairy farmers are eligible for a federal payment whenever the minimum monthly market price for farm milk used for fluid consumption in Boston falls below $16.94 per cwt. Eligible farmers receive a payment equal to 45 percent of difference between the $16.94 target price and the lower monthly market price. The payment quantity is limited to 2.985 million pounds of annual product.
2. Directing the Secretary of Agriculture to establish a herd retirement initiative.
In an effort to reduce milk supply and balance the dairy market, the Murphy proposal would direct the Secretary of Agriculture to establish a herd retirement initiative in coordination with a third party organization to reduce the dairy herd size by the number of cows necessary to balance dairy supply with current demand. Under the program, the Secretary would be authorized to enter into a contract with a third party to retire an adequate number of dairy cows to balance dairy supply with demand. It is estimated that there are approximately 9.2 million dairy cows in the United States, approximately 200,000 more cows than required to meet the current demand for dairy products. The proposed program would offer incentives for dairy farmers looking to reduce their herd size or retire from the industry to leave with dignity and without a heavy financial burden. Under the proposed program, dairy farmers would be offered a price per cow, plus the profits earned at slaughter.
Congressman Murphy will introduce this proposal early next week, at which time the full text and details of the bill will be made available.
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