Dairy farmers raise concerns about lack of farm bill
First, let's do the math.
According to the most recent statistics, the average American consumes approximately 23 gallons of milk per year. Factor in cheese, butter, sour cream and other dairy products, and the number skyrockets.
Using that statistic, the average family of four purchases about 100 gallons of milk per year. At $3 per gallon, that's nearly $300 per year spent on milk alone.
If the price of milk doubles, the average family of four would spend nearly $600 per year on liquid milk; that's about 1 percent of the income of a family making $60,000 per year. For poorer families, the percentage increases.
And if the price of milk doubles, the cost of other dairy products - and everything they go into - will undoubtedly increase. It could mean much steeper food costs for consumers.
So why the math lesson?
There's a real chance it could happen early next year.
The most recent federal farm bill expired Sept. 30, and Congress has been unable to pass a new one. In part, federal farm bills are meant to protect farmers through a series of subsidies and price supports. The first farm bill was signed into law in 1933.
Without a new farm bill, the law would revert back to a parity formula from 1949 that would require the government to purchase dairy products at inflated prices.
"Without (a new farm bill), milk will be $6 per gallon," said Bob Nichols, who runs a 70-cow dairy operation in Addison. "We're at the mercy of things we can't control."
Steve Ammerman, a spokesman with the New York Farm Bureau, said that if Class A (consumer) milk prices increase, it's likely other classes of milk will, too.
"It's fair to assume that dairy prices in general will rise," he said.
The lack of a new farm bill could hit the average American family hard, but it would be devastating to the country's farmers, who are already feeling the effects.
Most farms and their 2012 crops are still covered by the expired farm bill until the end of the year, but dairy farmers are the exception. When the farm bill expired, dairy farmers lost the protection of the Milk Income Loss Contract program, which pays farmers when milk prices fall below a set rate, which was $16.94 per hundredweight.
On top of the MILC loss, dairy farmers have been dealing with higher feed and fuel prices, and protections against those are gone without a new farm bill.
"Smaller dairy farmers are really feeling squeezed," Ammerman said. "The safety net has been yanked out from under them."
Small dairy farms make up the majority statewide and nationwide. All told, 74 percent of dairy farms have fewer than 100 cows, according to dairyfarmingtoday.org, and New York's 5,100 dairy farms account for approximately 10 percent of all dairy farms nationwide.
"Nervousness, frustration, anxiety," Ammerman said to describe the collective mindset of New York's dairy farmers.
U.S. Rep. Tom Reed, R-Corning, echoed Ammerman's statement.
"As we meet with our agriculture advisory board made up of local farmers, the biggest concern we hear is about uncertainty," Reed said. "Farmers need to know what margin insurance protection options will be available moving forward. Feed and other costs have skyrocketed this year, hitting smaller dairy farms particularly hard."
The lack of a farm bill will increase prices and put farmers at risk, and it could also cost countless jobs statewide and severely impact the regional economy.
In 2007, Yates Couny's agricultural sales were $88.4 million and Ontario County's totalled $1538 million, according to the U.S. Department of Agriculture. Steuben County's agricultural sales were between $100 million-$150 million and in Chemung and Schuyler counties, agricultural sales were between $15 million and $60 million each.
In 2010, milk sales accounted for 47 percent ($2.21 billion) of the state's $4.67 billion in total agricultural sales.
"Dairy's an important part of our economy, no matter how you slice it," said Dan Hubbard, the president of the Steuben County Farm Bureau.
Despite the collective uncertainty and anxiety, some local dairy farmers say they'll be better off without a new farm bill because they can make more money, although they're in the minority.
"In theory, farmers could make more money," Ammerman said. "If milk prices shoot up, they could potentially make more money. But it's likely consumers will not pay that much and demand will drop. It puts a bad taste in consumers' mouths."
If demand drops significantly, it could lead to system collapse, some say. In that case, the lack of a farm bill would be catastrophic.
"If prices collapse, there will be no help at all," Nichols said.
As for the prospects of a new farm bill, the Senate passed a bipartisan bill in June that would save taxpayers $23 billion by eliminating and streamlining numerous programs.
The House has not passed a new farm bill, although the Agriculture Committee approved one earlier this year that would save taxpayers $35 billion, mostly through cuts to the food stamp program. House leaders have said the committee's bill has not been brought before the full House because there aren't enough votes to approve it.
Even if the House passes a new bill soon, the Republican-led chamber has issues with the Senate's bill, Reed said.
"We feel strongly that any farm bill must address the crop insurance reforms, agricultural labor reforms, dairy program reforms, and specialty crop reforms local farmers are asking for," Reed said. "The pre-election status quo bill passed by the Senate does not sufficiently address any of these areas."
Despite the differences, Reed said he's optimistic in getting a new deal done by the end of the year. Nichols agreed.
"They'll put some farm bill together before end of year, in my opinion," Nichols said.