Murphy plans steps to help dairy farmers

BALLSTON SPA—Congressman Scott Murphy (D-20) has issued the outline of measures he expects to introduce in the House intended to help dairy farmers at a time when milk prices are plummeting. Mr. Murphy said Saturday that he believes immediate action must be taken to provide immediate relief to struggling dairy farmers and stabilize the dairy market for the future.

Mr. Murphy’s district includes all of Columbia County, where dairy farming remains an important part of the local economy.

Noting that New York is the nation’s third largest dairy producing state and that dairy farmers are vital to the Upstate economy and community Rep. Murphy said in a press release from his office, “This proposal works two-fold, by providing immediate relief to our struggling dairy farmers today, and stabilizing the dairy industry for tomorrow. Before more small farmers are forced out of business, we need to bring fast relief and stability to the industry.”

After experiencing record milk prices in 2007 at $21.70 per cwt (hundred weight—the standard measurement of bulk milk from the farm) and strong prices in 2008 ($18.41 per cwt), milk prices have fallen to less than $12 per cwt in the first five months of 2009. The U.S. Department of Agriculture now projects that the all-milk price will decline to an average $12.15 per cwt in 2009—the lowest average annual price received by farmers for milk since 1979.  In New York State alone, producers are likely to see revenues plummet by over $650 million in 2009, according to the congressman.

Mr. Murphy said his proposal will include the following elements:

An immediate and retroactive increase in the MILC safety net program. He would double the payment rate from 45 percent to 90 percent for the period beginning on March 1 through November 30, 2009. Currently, participating dairy farmers are eligible for a federal payment whenever the minimum monthly market price for farm milk used for fluid consumption in Boston falls below $16.94 per cwt.  Eligible farmers receive a payment equal to 45 percent of difference between the $16.94 target price and the lower monthly market price. The payment quantity is limited to 2.985 million pounds of annual product.

Direct the Secretary of Agriculture to establish a herd retirement initiative. In an effort to reduce milk supply and balance the dairy market, the proposal would direct the Secretary of Agriculture to establish a herd retirement initiative in coordination with a third party organization to reduce the dairy herd size by the number of cows necessary to balance dairy supply with current demand. It is estimated that there are approximately 9.2 million dairy cows in the United States, approximately 200,000 more cows than required to meet the current demand for dairy products. The proposed program would offer incentives for dairy farmers looking to reduce their herd size or retire from the industry without a heavy financial burden. Under the proposed program, dairy farmers would be offered a price per cow, plus the profits earned at slaughter.

Congressman Murphy plans to formally introduce his proposal this week, at which time the full text and details of the bill will be available.

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