The ads and billboards promoting milk as a healthy food are important, but they mask a truth: our dairy farmers are struggling to pay their bills and stay in business – producing food for us – because of historically low milk prices and continually rising costs of feed, fuel, equipment, health insurance and taxes. Milk is New York State’s leading agricultural product and is produced all across the state. Milk sales account for 50 percent of total agricultural receipts with production totaling 11.7 billion pounds in 2005, the nation’s third leading producer. California and Wisconsin are first. Cash receipts from the sale of milk by New York farmers totaled $1.91 billion in 2005, down 2 percent from the previous year. The $15.90 per hundredweight (cwt.) farmers got paid for their milk, on average, had dropped almost a dollar – 90 cents – or 5 percent below the $16.80 per cwt. they were paid in 2004. I wonder how many businesses could stay going when the price they receive for their product keeps dropping, yet their costs keep rising. Are you paying less for lettuce, eggs or Starbucks coffee? Unfortunately, the price farmers receive for their milk is set under a complicated formula that few -- even legislators – understand. While the Department of Agriculture and Markets monitors retail milk prices to help prevent consumers from being subjected to price gouging, the federal government sets the price dairy farmers will receive for their milk, which is approximately 50 percent of the retail cost of milk. The federal milk pricing structure sets the price for a producer’s milk based on how the milk is utilized (e.g., for drinking or cheese production). On that basis, farmers receive varying prices. What has the state been doing to address milk pricing? In 2003, the state legislature approved a measure that conforms the Milk Producers’ Security Fund to the federal Northeast Milk Marketing Order (Chapter 506, L. 2003). Prior to 2000, most of the state’s milk dealers were regulated by the New York-New Jersey Milk Marketing Order, a federal milk marketing order administered by the USDA. The order required, among other things, that regulated milk dealers pay for milk purchased from dairy farmers by certain dates and that payment be adjusted based upon the amount of butterfat contained in the milk. In 2004, the state legislature approved a measure that provides that food shall be deemed misbranded if it contains milk protein concentrates, caseinates, or added casein and it is not labeled as containing such substance. This was an effort to boost the use of genuine milk in milk and dairy products, instead of substitutes. If you use retail products like powdered Coffee Mate in your coffee or tea, check the ingredients. It doesn’t contain milk – it contains milk substitutes. In 2006, the Senate approved a Dairy Farm Improved Energy Efficiency Loan Fund to provide grants to dairy farms for energy efficiency projects and advanced energy technologies. This was an effort to address one of farmers’ principle factors pressuring their bottom lines – energy costs. This year, I participated in several hearings as a member of the Senate Agriculture Committee to assess how we can assist our farmers. Several proposals came out of the hearings, including reactivation of federal interest in a northeast dairy compact, where prices will reflect conditions in the northeast, additional tax relief, and some kind of cash assistance to farmers. When I think of small businesses in rural areas, dairy farming comes to mind quickly. And farming has a huge impact on other sectors of the economy, such as equipment dealers, feed haulers, trucking and even railroads. Farms are important to our area and our economy, and we must have sensible, intelligent state policies that encourage the continuation of our family farms. |