Dairies to get temporary help from USDA
August 1, 2009
The U.S. Department of Agriculture, at the urging of several Congressional members, announced Friday that it was coming to the aid of dairy farmers who are in the middle of one of the worst crises in decades.
The USDA said it will be increasing the amount paid for dairy products through the Dairy Product Price Support Program.
Les Hardesty of Greeley, chairman of the Dairy Farmers of America Mountain Area Council, lauded the move and said he hopes it will lead to a reform in federal dairy product pricing.
“This is temporary relief for the dairy industry nationwide that is hurting badly,” said Hardesty, who milks 650 cows northwest of Greeley. “It will help out on the short term and hopefully give us time to work on long-term reform in pricing within the industry.”
The price increase, he said, will remain in effect for the next three months.
Agriculture Secretary Tom Vilsack said Friday the price increase will provide immediate relief, helping to keep dairy farmers on the farm while they weather what he called “one of the worst dairy crises in decades.”
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The USDA increased the price paid for nonfat dry milk by 12 cents a pound, cheddar cheese blocks by 18 cents a pound, and price for barrels of cheddar cheese by 18 cents per pound.
According to Sen. Michael Bennet, D-Colo., the increase in the support price will have an immediate effect on the dairy farmers’ bottom line. Temporarily raising the price of the products increases the price that dairy farmers receive for milk.
Hardesty said Vilsack and Congressional members “have been doing what they can for what’s best for dairy farmers and we appreciate that.”
“Between falling commodity prices and continued concerns about the economy, Colorado’s dairy producers are feeling the pain,” Bennet said in a press release. He pointed out that agriculture is a vital part of the state’s economy, and “we need to do everything we can to make sure the industry remains strong.”
The USDA estimates the move will increase the milk price received by dairy farmers and should result in the government purchase of an additional 150 million pounds of non-fat dry milk and an additional 75 million pounds of cheese.
According to Rep. Betsy Markey, D-Colo., the move will increase dairy farmers’ revenue by $243 million.
“This is great news for Colorado dairy farmers,” she said in a press release.
The price of milk crashed late last year and dropped to some of the lowest levels dairy farmers have seen in several years. The drop in price was driven by several factors, including the world economy and recession. As a result, dairy farmers have seen an average price of $4.80 per 100 pounds below the U.S. average cost of production, according to federal officials.
Vilsack has said the department is reviewing dairy policy to determine what changes are needed to reduce price volatility and enhance farmer profits.