August 04, 2009

Gillibrand, Schumer Announce Passage of $350 Million to Help Dairy Farmers Reeling From Crisis

Schumer, Gillibrand Co-Sponsored Amendment That Will Deliver Money Directly Into The Pockets Of NY Dairy Farmers

Washington, DC - U.S. Senators Charles E. Schumer and Kirsten Gillibrand announced passage of an amendment to Agriculture spending bill that will direct $350 million to the Farm Service Administration to help New York farmers struggling during the dairy crisis.  Senator Bernie Sanders of Vermont authored the amendment.

"I commend Chairman Kohl, Senator Sanders, Senator Schumer, and others for doing what's right for dairy farmers in New York and across the country," Senator Gillibrand said. " During these tough economic times, this increase will bring some much needed relief for our farmers. While this is great for New York's dairy farmers, this is only a temporary solution to the fundamental problems with the dairy pricing system.  I will continue to work for a long term fix for our farmers."

"Our dairy farmers are hurting.  A large step was taken last week when we convinced Secretary Vilsack to increase prices paid to farmers, and this is an important  second step.  We need more to ensure that our dairy farmers survive this crisis and we will continue working to make sure that they do," Senator Schumer said.

New York farmers are facing a dairy pricing crisis. According to Farm Credit, it costs dairy farmers $17.58 to produce a hundredweight of milk. Yet the market is only paying $13.33 per hundredweight.  The Milk Income Loss Contract (MILC) program was designed to be a safety net when there is a large price discrepancy. However, as the MILC program currently works, farmers are not even receiving enough income to cover the cost of staying in business. New York farmers have been forced to either take on massive debt to cover their costs or go out of business.

On Friday, USDA Secretary Tom Vilsack announced a temporary increase that will  raise the price paid for nonfat dry milk from $0.80 per pound to $0.92 per pound, the price paid for cheddar blocks from $1.13 per pound to $1.31 per pound, and the price of cheddar barrels from $1.10 per pound to $1.28 per pound. This increase in the support price will have an immediate effect upon dairy farmers' bottom line. Temporarily raising the price of these dairy products increases the price that dairy farmers receive for their milk.