N.Y. Farm Bureau seeks 'crisis relief' as milk prices plummet

ALBANY — As milk prices continue their historic slide, the New York Farm Bureau seeks help for the state's dairy farmers.

In a letter sent to the state's Congressional delegation last week, New York Farm Bureau President Dean Norton said "crisis relief" is in order.

Historically low milk prices combined with "erratically high energy, feed and fertilizer costs," have caused financial difficulties for the state's dairy farmers. The dairy industry is the state's largest agricultural sector with roughly 6,200 producers. The recessionary economy has slowed demand for dairy products, both at home and abroad, causing a surplus that has further undercut down prices.

The farm bureau said that in January, the average price farmers received was $13.39 per hundredweight or $1.15 per gallon, far below the average break-even cost of $17.50 per hundredweight or $1.50 a gallon.

Among the policies the state Farm Bureau advocates are:

■ An increase in the Milk Income Loss Contract payment program. These payments are currently triggered when the Class I milk price in Boston has fallen below $16.94 per hundredweight. The base payment rate is any positive difference between $16.94 and the Boston price, times 45 percent. Payments are limited by production. Producers may receive payments on up to 2.985 million pounds per fiscal year.

■ Additional funding for MILC via an immediate supplemental appropriation or the fiscal year 2009 Agriculture Appropriations Bill.

■ NYFB wants USDA to utilize commodity data more accurately reflecting Northeast feed costs as part of the MILC payment rate formula. Instead, data would be based on Northeast or state feed costs for calculation of the feed cost adjuster that determines the MILC payment rate. Current commodity cost data is based on feed costs from the Midwest, shortchanging New York farmers by not using true Northeastern feed costs.

■ Eliminate dairy powder from the domestic market by using the Dairy Export Incentive and Food for Peace programs to offset overproduction.

■ Reinstate the Northeast Interstate Dairy Compact to provide long-term sustainable support to the dairy industry. The original compact, which lasted from 1996 to 2001, allowed New York and the six New England states to collectively set a fluid milk price above the federal minimum milk price.

■ Make immediate dairy product purchases for WIC and other nutrition programs, both of which received large funding increases from the federal stimulus package.