Group wants USDA to boost dairy prices

WASHINGTON — An organization representing dairy farmers around the country called on the Obama administration to boost prices the government pays for excess cheese and powdered milk, saying the move would help ease the strain that low milk prices have caused farmers this year.

The National Milk Producers Federation asked the U.S. Department of Agriculture to raise support prices by several cents per pound for cheese and nonfat dry milk, two products that heavily affect milk prices paid to farmers.

A similar idea fell short in the last five-year farm bill, but the federation made the same proposal again, figuring rock-bottom prices in recent months might spur the USDA to action.

"Raising the price support levels by a few pennies a pound will be a simple and effective way to offer some assistance to farmers facing a very difficult summer," said the federation's chief executive officer, Jerome Kozak, in a press release.

The federation estimated raising support prices from $1.13 per pound to $1.19 per pound for cheddar cheese and from 80 cents a pound to 84 cents a pound for nonfat dry milk would generate about $235 million this year for dairy farmers.

Agriculture Secretary Tom Vilsack has said he is open to various ideas for helping dairy farmers, but he has not voiced much support for raising support prices. He has boosted the department's purchases and sales of excess dairy products through the price support program, however.

The National Milk Producers Federation has come under criticism from some farmers for not endorsing bolder measures. But as a national organization, it is sometimes challenged to find positions that dairy farmers in all regions support. The federation has not, for instance, supported calls to change the way the government sets minimum milk prices, such as by linking them to farmers' climbing costs of production.

Nor has the federation endorsed legislation to boost a government subsidy program that pays farmers when milk prices fall below a certain target.

However, the federation has taken some measures on its own, such as continuing a program that removes cows from dairy herds in an effort to tamp down production and keep prices higher. It also urged the USDA to export as much milk as possible through trade subsidies, although world trade rules limit such efforts.

"As much as we'd like there to be some silver bullet that will restore dairy farm profitability, there is no simple solution to a problem tied to the poor health of the global economy," Mr. Kozak said. "But strengthening the price support safety net represents a needed and quick fix to keep many farmers afloat at a time when the tide of red ink continues to rise."