Officials need to be part of the solution to help this important industry, whose collapse could send ripples through the state and regional economies.


 

 

After generally higher milk prices over the past two years, the U.S. dairy industry is in shambles.

The economic downturn has reduced demand for milk, cheese and other milk-based products at home and, especially, overseas, leading to a steep slide in prices. That might be good for consumers’ wallets, but it’s murder on dairy farmers.

New York’s dairy farmers received an average of $14.40 per hundredweight of milk last month, according to the U.S. Department of Agriculture. That was down $1.70 per hundredweight from the month before and $6.90 — roughly a third — from January 2008.

Exacerbating the deteriorating economic conditions, says Rep. Eric Massa, a member of the House Agriculture Committee, is the fact that dairy industries in many nations are subsidized far more than those in the United States; thus, some of their products, such as milk solids, an ingredient in many processed foods, are cheaper to import.

It’s a formula for disaster.

And that’s pretty much what we’ve got. In California, the nation’s largest dairy producer, farmers are getting 80 cents for a gallon of milk. That’s less than half what the state’s agriculture department figures it costs to produce. It has gotten so bad, farmers are sending high-producing dairy cows to the slaughterhouse.

Dairy prices are federally regulated but in New York, as in California, current milk prices are below the cost of producing the product, even after federal subsidies are taken into account.

State Sen. George Winner is calling for state help, noting the 2007-08 budget had $30 million available to shore up the dairy industry following the last big price swoon, in 2006. He’s hoping for a similar amount in the next budget.

It might be a tough sell, given the state’s budget difficulties, but maybe a compromise figure can be reached. If not, Winner and those in the New York’s dairy industry, the third largest in the nation, think many farms could go out of business.

On the federal end, Sen. Charles Schumer wants the Agriculture Department to increase demand by purchasing more dairy products for government low-income, school and nutrition
programs.

Such action would help more than dairy farmers. Financial problems from the loss of state dairy operations — the largest sector of New York’s agriculture industry — could send ripples through the state and regional economies.

If the government can give billions to greedy, incompetent bankers, it can afford to help farmers.

Dairy farmers, who provide food and help protect land from development, should be in line for immediate help while longer-term solutions are forged to make for a more stable industry.

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