Press Release

In Response To NY Dairy Crisis, Gillibrand Chairs Senate Agriculture Committee Hearing On Dairy Pricing

Oct 27, 2009

Washington, DC – In response to the dairy crisis that is affecting New York’s dairy farmers, U.S. Senator Kirsten Gillibrand today chaired an Agriculture Committee Hearing on dairy pricing in Washington, DC. Senator Gillibrand presided over the hearing entitled, “Responding to Low Dairy Prices: Exploring Avenues for Federal Action,” which will explore the various proposals currently being presented as a response to historically low dairy prices. The hearing will be a chance to develop solutions that will mitigate the boom and bust cycle that dominates the American dairy industry.

As New York’s first member of the Senate Agriculture Committee in nearly 40 years, Senator Gillibrand is giving a strong new voice and a real seat at the table for New York’s dairy farmers and agricultural communities struggling in these tough economic times. Senator Gillibrand released the following opening statement:

“Good afternoon. I am pleased to co-chair this hearing today with my fellow subcommittee chairman Senator Casey. I would like to thank Ranking Member Johanns for being here, as well as all the other Senators that have joined us to engage these distinguished panelists in a dialogue about the crisis now facing the American dairy industry. The cost of doing business continues to surpass the price farmers are receiving for their product. There are not many businesses where people do backbreaking labor seven days a week and come out financially worse for their trouble.

“Since February, prices per hundredweight have remained well below the cost of production. In my home state of New York, farmers pay over 18 dollars to produce a hundredweight of milk. After action this summer by Congress and the USDA, prices have only recently risen to $15.80, still a losing game for our farmers. The current pricing system simply does not work for America’s hard-working dairy farmers.

“As I have met with farmers from across New York State, I saw the despair on their faces as they showed me the balance books that simply did not add up. I heard stories of families quickly seeing generations of hard work simply vanish into foreclosure.

“Dairy farmers compose the economic backbone of many of America’s rural communities. Over 60,000 American families directly earn their livelihoods from the dairy industry. Dairy farms also have a multiplier effect, creating support jobs that strengthen local economies.

“In addition to hurting our agricultural communities, losing our locally-producing, family-owned dairies will pose a huge threat to the safety of the American food supply. Instead purchasing products made to satisfy American food safety standards, a race to the bottom will mean importing food from wherever costs are the lowest – places like China. As experience has shown us over the last few years, giving up our ability to produce our own food is something we cannot afford to do as a national security priority.

“I hope this hearing will give us an opportunity to have a frank discussion about all the proposals currently out there and help members of the committee develop a solution that works for dairy farmers, processors and American families. With the sustained low prices we have seen for the last few months, it is important that we provide farmers with the short-term assistance they need to make up for the money they are losing every day. In order to achieve that goal, I have introduced two pieces of legislation designed to improve the MILC program’s ability to provide a true safety net during this crisis. It is my hope to work with other members of Congress to ensure that this crucial aid becomes a reality so we do not lose any more farms.

“However, as we have been seeing, there is something fundamentally wrong with the way dairy farmers are paid for their work. We must develop new solutions to ensure that this does not ever happen again. My colleagues in Congress and agricultural advocacy groups across the nation have been working on a number of proposals to help remedy the many problems facing the dairy industry. Today’s hearing will focus on these solutions in order to determine the opportunities they present and shortcomings they face.

“I am dedicated to developing comprehensive legislation that fixes the problems in the industry once and for all. Today’s hearing will serve as a starting point for discussions as we begin working on the next Farm Bill.”

Senator Gillibrand is giving a strong new voice and a real seat at the table for New York’s dairy farmers and agricultural communities struggling in these tough economic times.

In June, Senator Gillibrand introduced legislation that would double the amount of money farmers get from the MILC program retroactive to the low point of the crisis in March. She also introduced legislation that would index the MILC rate of $16.94 to inflation. The MILC program payments were originally designed to help dairy farmers in their time of need, but have remained stagnant. The price floor of $16.94 per hundredweight has not changed since the 1990’s, yet the cost of production has increased exponentially.

In July, after meeting with Senator Gillibrand, the USDA announced immediate action to support struggling dairy farmers by increasing the amount paid for dairy products through the Dairy Product Support Program (DPPSP). The increase went into effect in August and will continue through the end of October.  The increase is expected to generate an additional $243 million in revenue for dairy farmers.

In August, Senator Gillibrand held a field hearing in Batavia, New York that focused on identifying major problems with the current dairy pricing system and determining effective solutions moving forward.  This was the first of a series of hearings she plans to hold both in Washington, D.C. and New York State that will focus on needed reforms for the daily pricing system. Senator Gillibrand is working with stakeholders and economists to develop a proposal before the next Farm Bill is written in 2012.

Just last month, Senator Gillibrand announced $350 million for the USDA to help New York farmers struggling during the dairy crisis in the final Agriculture Appropriations Bill. The agreement includes $60 million in cheese and dairy product purchases for food banks and other nutrition and feeding programs, and $290 million in direct support to dairy farmers using guidelines to be determined by the Secretary of Agriculture. Senator Gillibrand said the direct payments will be important to help keep dairy farmers solvent during this current crisis.