Dairy farmers faced their greatest crisis since the Great Depression this summer. In July, the price they received for milk dropped 50 percent from December prices. In the meantime, large food companies are making excellent profits on dairy products, which is raising eyebrows.
Last Wednesday, both chambers of Congress agreed to $350 million in aid for dairy farmers, with $290 million in direct support of dairy farmers under a program the U.S. Department of Agriculture will create. The rest, $60 million, will go towards purchasing surplus cheese and other dairy products. Food banks and other nutritional programs will receive the products. The aid is part of a $23 billion Agriculture Appropriations Bill for the fiscal year that starts Thursday.
Senator Herb Kohl (D-WI) and Rep. David Obey (D-WI) were key players in getting their fellow lawmakers to agree to set aside funds to aid dairy farmers. Kohl chairs the Senate’s Agriculture Appropriations Panel, and Obey chairs the House Appropriations Committee.
Obey argued for using all the funds for direct payments to farmers. “We didn’t get everything we wanted,” he said, “but the compromise ensures important and timely help to farmers and our rural communities.”
“We hope this funding can provide a measure of relief to the farms and small businesses that are struggling to stay afloat through this storm of mounting costs and debt,” said Kohl.
“We expect the Secretary to use these resources in a way that maximizes their impact on struggling dairy producers,” Kohl said. “There are fractious dairy interests to balance, because we’ve got different types of dairy farms all across the country and they’re all hurting.”
“The department will implement these provisions in a way that’s consistent with the intent of Congress,” said Agriculture Department spokesman Caleb Weaver.
“Vermont’s dairy farms are an integral part of our economy and our way of life. We’ve got to do everything we can to preserve them,” said Senator Bernie Sanders (VT-I). “While this funding will provide some much needed emergency relief, we must also develop some long-term policies which will provide fair and stable prices for dairy farmers.”
Rep. Peter Welch (VT-D) introduced a bill into the House to limit foreign imports of dried milk powder. The bill titled, the Milk Import Tariff Equity Act, will treat milk protein concentrates (MPC) like all other dairy products. In the past ten years, MPC imports have more than doubled. Critics of importing MPC argue that it drives down the prices dairy farmers are paid.
“As international dairy producers have flooded the American market with milk protein concentrate, Vermont’s dairy farmers have paid the price. By circumventing trade agreements, these producers have contributed to the plummeting price of milk and caused many Vermont farmers to go out of business,” Welch said. “This legislation will simply level the playing field and ensure that all dairy producers play by the same rules.”
A 2004 International Trade Commission report discovered that MPC “may have displaced approximately 318 million pounds of U.S. produced milk protein [equivalent to 883 million pounds of non-fat dried milk] between 1998 and 2002.”