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Gillibrand Helps New York's Dairy Farmers Get Price Increases

by: robert.harding

Fri Jul 31, 2009 at 17:24:09 PM EDT


With the return of the Congressional Dairy Farmers Caucus and dairy farmers all over New York are facing overseas competition that is adversely impacting dairy prices, Sen. Kirsten Gillibrand stepped up to the plate and called on the Department of Agriculture to raise milk prices.

And Gillibrand, along with the dairy farmers of New York, got what they asked for.

Gillibrand, who is the first New Yorker in over 40 years to serve on the Senate Agriculture Committee, announced today that Secretary Tom Vilsack and the USDA will increase dairy pricing which is expected to give dairy farmers an estimated $243 million in revenue.

After meeting with U.S. Senator Kirsten Gillibrand this week, U.S. Department of Agriculture (USDA) Secretary Tom Vilsack 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 will be in place from August 2009 through October 2009 and is expected to generate an additional $243 million in revenue for dairy farmers.

"While this is great for New York's dairy farmers, this is only a temporary solution to the fundamental problems with the dairy pricing system," Senator Gillibrand said. "When I met with Secretary Vilsack on Wednesday, I made it clear that the current system is not working for New York dairy farmers - who have been pushed farther and farther toward bankruptcy. During these tough economic times, this increase will bring some much needed relief for our farmers."

New York farmers are facing a dairy pricing crisis. According to Farm Credit, it costs dairy farmers $17.58 to produce a hundredweight of milk. Yet the market is only paying $13.33 per hundredweight.  The Milk Income Loss Contract (MILC) program was designed to be a safety net when there is a large price discrepancy. However, as the MILC program currently works, farmers are not even receiving enough income to cover the cost of staying in business. New York farmers have been forced to either take on massive debt to cover their costs or go out of business.

Senator Gillibrand has been working tirelessly to bring relief to New York's dairy farmers. Wednesday, Senator Gillibrand wrote to Secretary Vilsack urging the USDA to follow the Farm Bill, which she helped craft as a member of Congress, when establishing an advisory board to review issues surrounded milk pricing and dairy competitiveness.

Earlier this month, Senator Gillibrand unveiled her three-point plan to bring relief to New York's dairy farmers, including legislation to double the amount of money farmers receive from the MILC program, legislation to index the MILC rate to keep up with inflation, as well as plans to hold Senate hearings on dairy pricing both in Washington, D.C. and New York State.

The increase announced today will raise the price paid for nonfat dry milk from $0.80 per pound to $0.92 per pound, the price paid for cheddar blocks from $1.13 per pound to $1.31 per pound, and the price of cheddar barrels from $1.10 per pound to $1.28 per pound. This increase in the support price will have an immediate effect upon dairy farmers' bottom line. Temporarily raising the price of these dairy products increases the price that dairy farmers receive for their milk.

This is significant for a number of reasons. For starters, it is good to have someone in the U.S. Senate defending the interests of New York's farmers. While upstate New York benefits from this greatly, we do have farms in areas like Long Island where the importance of agriculture is worth noting.

Dairy farmers everywhere, especially in New York, have been suffering for a long time. Not only is this a tough economy, but with overseas competition for milk, it is hard for a lot of the small farmers to compete. This will help them get on their feet and give them some extra revenue for their operations.

Kudos to Gillibrand for standing up for the dairy farmers of New York and other states where dairy farms play a vital role.

robert.harding :: Gillibrand Helps New York's Dairy Farmers Get Price Increases
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Thanks, Robert (4.00 / 2)
This really deserves highlighting. Gillibrand worked tirelessly to get some relief for the staggering dairy farmers, and today she really came through.  This will have a beneficial impact all across rural New York.  It's even better to see Senator Gillibrand still has plans to take on the structural problems with milk price supports so that this doesn't happen in the future.

Gillibrand was a solid supporter of farmers (4.00 / 1)
of all kinds in NY-20, and now, as Senator, she's a similiarly solid supporter of farmers across the state.

And there is nothing at all wrong with that.

Of course, most New Yorkers are not farmers.

But all New Yorkers eat and drink farm products, and the more those products come from in-state, the better, all around.


The problem with "milk price supports" (4.00 / 1)
The fact is, rather than supporting dairy prices, the government is limiting those prices, and subsidizing farmers.  Stores cannot charge what the market will bear, on the mistaken belief that dairy products are essential for good nutrition.

(Side note:  Dairy products are not essential for good nutrition.  Eating fresh fruits and vegetables, along with sufficient protein, gives you all the nutrients you need.)

Meanwhile, because dairy farmers cannot compete in the marketplace, they rely on government handouts to make up the difference between what they could charge and what they are allowed to charge -- and that handout never does the job.

In addition, there is a hideous tariff scheme that doesn't reflect properly what other countries do to subsidize their products (BTW, that tariff scheme failure is not just in dairy, it extends across the entire agricultural spectrum).

Other subsidies are provided for other products, based mostly on two factors -- what are other countries doing, and how can we sell excess agricultural products to underdeveloped countries.

There are three rotten results of this program.  First, Americans are getting fat, because the cost of food is kept artificially low.  Second, many countries around the world cannot afford to grow their own food because subsidized imports from America are cheaper; these countries, therefore, cannot begin to develop their own economies.  Third, farmers are constantly hurting.

If we wanted government to do the job properly, we should insist that all subsidies be removed (with the possible exception of produce grown fresh -- not processed -- for domestic consumption), and that tariffs reflect not only subsidies granted by other governments (plus a penalty).  That way, the cheapest food would be the best food -- fresh fruits and vegetables.

The result would be a slimmer population at home, and development abroad.

Yes, many domestic farmers would go out of business.  But they are growing far more food that we can consume, and their jobs would be replaced by jobs to create and export other goods to newly-developing countries.

This shift cannot happen overnight; it must be done over time.  But it is the way to put the genie back in the bottle.


Couldn't Agree More (0.00 / 0)
Yes, I know that many New York milk producers depend on price supports. But in just about every other industry, when competition makes the same product for less it forces others to do the same or get into other fields of work.

I don't want to subsidize corn farmers in Iowa. I don't see why I should apply a different standard just because it happens to be in my home state.

Unfortunately, it seems just about impossible to run for president without supporting corn subsidies (since the first caucus is in Iowa). Likewise, it seems just about impossible to be elected a New York senator without supporting milk subsidies.

devtob: But all New Yorkers eat and drink farm products, and the more those products come from in-state, the better, all around.

I think poor families who are paying more for these products than they would otherwise might have a different opinion.


[ Parent ]
More "kudos" for Kirsten Gillibrand (0.00 / 0)
I was waiting for Robert Harding to offer more "kudos" to Kirsten Gillibrand for her recent support for the G.I. bill.

In a recent press release she says, "Our veterans and their families have sacrificed everything for our freedoms, and in return, they deserve every opportunity for a bright future."

As an U.S. Army veteran, E-5, sergeant, 98C2LRU, 1975-1979, I appreciate that our senator values veterans' sacrifice "for our freedoms," but am dismayed that she, herself, doesn't think those freedoms are worth preserving, at least as it relates to the First and Fourth Amendments of the Bill of Rights.

I put little stock in the words of a senator who proclaims to value the sacrifice of veterans for freedoms that she clearly has no respect for, as she voted to approve unwarranted, unconstitutional wiretapping of American citizens.

I also put little stock in the words of those you who are working so hard to keep fellow Democrats from a having an opportunity to vote for someone who will fight for our freedoms out of a sense of duty and principle ...

... and not just -- as Sen. Gillibrand does -- only when political expediency -- and her corporate contributors -- allow her to do so.


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