Today, on a conference call, U.S. Senator Charles E. Schumer warned that the deadline is fast-approaching for the House of Representatives to take action and pass the bipartisan Senate Farm Bill, in order to avoid the "dairy cliff", which would have a devastating impact on dairy consumers and producers alike. Specifically, Schumer called on the House to take action before year's end, in order to avoid the real potential for consumers' milk prices to double across New York, and to temporarily bring back the Milk Income Loss Contract (MILC) program for over 5,400 dairy farms in Upstate New York, to bridge the gap before a new margin protection program can be rolled out. MILC, which provided over $41 million to New York dairy farmers in 2012 before it expired on September 30th, was the primary safety net that compensated dairy producers when milk prices fluctuated and cow feed costs jumped, as they have due to this year's drought.
The 2008 Farm Bill expired on September 30th, and on January 1st the nation will begin to revert to 1940s era agriculture policy. As it relates to New York dairy, that 1940s era policy requires the government to purchase nonfat dry milk, cheese and butter at prices significantly above current market rates. The massive government purchases of dairy products under this outdated law could cause milk prices to rise above $6 per gallon, according to the National Milk Producers Federation (NMPF).
"The "dairy cliff' is fast approaching, and without a House Farm Bill before year's end, it will be consumers and dairy producers alike that go over the edge," said Schumer. "On January 1st, families across Upstate New York could start to see over a hundred-percent increase in the price of milk at the supermarket, all while dairy farmers would lose important assistance from the feds that helps combat an unstable market and devastatingly high feed prices. What's worse, is that this is an entirely avoidable and unnecessary burden on families, schools and farmers alike, and it could be easily addressed. All the leaders of the House of Representatives must do is put the bipartisan Senate Farm Bill on the floor for a vote, and I'm sure that it will pass."
Schumer continued, "It is unacceptable to have allowed the Farm Bill to expire in September. Now, time is ticking and the House must pass the Senate Farm bill so we can all avoid crying over spilled milk."
"As we approach the final days to get the 2012 Farm Bill passed, the anxiety is growing for farmers who have already had the safety net pulled out from under them with the loss of the MILC program," said New York Farm Bureau President Dean Norton. "Now, they're facing the bottom falling out of the dairy market with prices expected to double if farm policy reverts back to the 1940s. It's a price few consumers would be willing or capable of paying, potentially upsetting the delicate supply and demand of milk. We urge other lawmakers to follow Senator Schumer's lead and get a Farm Bill passed, not only for the hard working farm families of New York, but for all families who depend on putting healthy food on their dinner tables,"
"Schools are in an incredibly fragile fiscal condition right now and they cannot afford either higher dairy prices or further injury to their rural tax base," said Timothy G. Kremer, executive director of the New York State School Boards Association. "Our students need accessible dairy products for good nutrition, and our schools need a stable local tax base to provide adequate funding for educational programs and services."
Schumer said that the easy way out of this problem is for the House of Representatives to pass the Farm Bill that was passed by a large bipartisan majority in the Senate. He revealed the county-by-county impact on New York dairies due to the expired MILC program, and provided most recent average milk prices for consumers that could double after January 1st. The Farm Bill is enacted every five to seven years and provides farm and food policy for America. The 2012 Farm Bill passed the Senate on June 21, 2012 by a bipartisan vote of 64 to 35. The Farm Bill has since expired, and aside from passing a bill out of the agriculture committee, the House has refused to bring the Farm Bill to the floor.
The dairy industry has already felt a serious negative impact from the lack of a final Farm Bill, since many provisions expired on September 30th . The dairy industry will be impacted on January 1st when the country reverts back to post-Depression era agriculture policy. At that point, the U.S. Department of Agriculture (USDA) must carry out the letter of the law, which means that milk prices across Upstate New York could rise significantly, according to agriculture experts. Additionally, dairy farmers who have seen an increase in exports in recent years could lose significant market share abroad if prices were let to soar. On the producer side of the coin, the MILC program expired on September 30th, and dairy farmers are already missing out on payments from this program during a time of extremely high feed prices due to the drought. Feed costs are traditionally the most variable component of dairy production operating margins. In both cases, House passage of the Senate Farm Bill is the only resolution.