Washington, D.C. – As the Senate gets set to again take up the Farm Bill in the coming weeks, U.S. Senator Kirsten Gillibrand today announced a comprehensive plan to help provide long-term support and certainty for New York’s dairy farmers by providing a fair safety net for small producers, and improving inventory reporting and transparency. The cornerstone of Senator Gillibrand’s plan is the new, bipartisan Gillibrand-Collins Dairy Pricing Reform Act to reform the way the USDA sets dairy prices.
The Farm Bill that passed the Senate last fall included many programs to help New York farmers, but the House of Representatives failed to complete their work on the bill, and none of the new programs became law.
“The squeeze facing our dairy farmers is driving them out of business and preventing them from growing to meet demand,” said Senator Gillibrand, New York’s first member of the Senate Agriculture Committee in nearly 40 years. “We can’t afford any more delay in Congress. We need to take action now to set the environment for our dairy farmers to thrive. These commonsense proposals can give our dairy farmers the certainty and stability they need to grow their businesses, and help strengthen our state’s rural economies.”
While dairy remains New York’s leading agricultural product – producing nearly 13 billion pounds for a value of $2.75 billion – dairy farmers are suffering from a range of setbacks. High fuel costs, and severe grain and hay shortages continue to push up the cost of production, yet the price paid to farmers remains stagnant– putting a squeeze on farmers, preventing New York from maintaining its competitiveness among other dairy states, and holding our farms back from a growing business.
As a result of the loss in business from flawed policy, dairy farms across New York State are forced to cut resources, and sell off cows. Nearly 65,000 cows were lost from New York dairy farms from 2002 to 2012, according to the U.S. Department of Agriculture.
- In Western New York, there were 121,000 cows in 2002 and 110,800 cows in 2012, a loss of 10,300 cows.
- In the Rochester Finger Lakes Region, there were 95,900 cows in 2002 and 108,800 cows in 2012, a gain of 12,900 cows.
- In Central New York, there were 144,800 cows in 2002 and 127,900 cows in 2012, a loss of 16,900 cows.
- In the Southern Tier, there were 75,700 cows in 2002 and 66,700 cows in 2012, a loss of 9,000 cows.
- In the Capital Region, there were 82,500 cows in 2002 and 65,300 cows in 2012, a loss of 17,200 cows.
- In the North Country, there were 138,600 cows in 2002 and 120,400 cows in 2012, a loss of 18,200 cows.
- In the Hudson Valley, there were 15,900 cows in 2002 and 10,100 cows in 2012, a loss of 5,800 cows.
Senator Gillibrand’s Dairy Agenda
Accurate Dairy Pricing
Senator Gillibrand and Senator Susan Collins (R-ME) will be introducing the Dairy Pricing Reform Act next week when the Senate returns to session. This bill forces the USDA to begin the hearing process to restructure the pricing system and direct the Secretary of Agriculture to release the Department’s recommendations to Congress. This bill builds on language Senator Gillibrand secured in the Senate Farm Bill (S. 10) that requires the USDA to study different methods of determining prices, including competitive pay pricing or shifting from a 4 class system to a 2 class system.
Dairy Income Fairness
Senator Gillibrand introduced and is leading the effort to pass the Dairy Income Fairness Act, legislation that would give farms with 200 cows or less a guaranteed $6.50 margin – the cost of milk minus the cost of feed – and exempts the first 200 cows from supply management. The bill would also extend the current Milk Income Loss Contract (MILC) program for nine months, pegged to inflation, while the USDA establishes a new and more sustainable program for dairy farmers.
Cold Storage Inventory Reporting
Inventories of certain types of classified cheeses have the ability to significantly influence trading activity on the Chicago Mercantile Exchange. However, cold storage facilities are currently not required to report their inventories of dairy products to the USDA Natural Agricultural Statistics Service (NASS), and only do so on a voluntary basis, creating an environment of volatility and uncertainty for dairy trading. In fact, by February of 2009, the low point of the dairy crisis, NASS reported that Cold Storage Inventories had been inflated by approximately 9 percent.
Senator Gillibrand led the effort on a provision in the Senate Farm Bill that would make reporting to the NASS Cold Storage Report mandatory, and give the USDA the authority to audit warehouse inventories to help bring more stability to dairy trading prices. Senator Gillibrand will continue to press this measure as the Senate considers the Farm Bill again this spring.
Transparency and Information for Dairy Farmers
To provide more transparency into dairy cooperatives and equip dairy farmers with more of the information they need, Senator Gillibrand secured language based on her bill, the Democracy for Dairy Producers Act, in the Senate Farm Bill (S.10). The legislation would require dairy cooperatives that engage in bloc voting to provide their member farmers with written notices when votes occur and requires each milk marketing order to establish an information clearinghouse to provide information regarding any proposed milk marketing order reforms. This information is required to be published on a website and distributed to producers.