USDA slow to act on milk price crisis

WASHINGTON — Dairy farmers hoping to hear long term solutions to the boom and bust cycle of milk prices may have to wait more than a year to hear any suggestions from the U.S. Department of Agriculture.

Despite talk from Congress about the urgency of the latest milk-price crisis, neither lawmakers nor the USDA have taken steps to establish a milk pricing commission mandated last year in the farm bill.

That yet-to-formed commission would explore why milk prices tend to climb to record highs, then tumble to near-record lows, only to spike again a few years later — and whether the federal system of setting minimum prices could be adjusted to provide farmers a living income while keeping dairy products affordable for consumers.

It would also explore whether the system, which dictates the minimum price that plants must pay farmers in various regions of the country, fosters or inhibits competition and transparency in milk pricing.

Congress directed the USDA to create the 14-member commission, subject to available funds, in the five-year bill that covers farm and food programs. But lawmakers did not provide money in USDA spending bills that are moving through Congress, and the USDA did not request funds in the budget for the next fiscal year, which begins Oct. 1.

The agriculture secretary is to appoint members as soon as funds are made available, the law states. The commission has up to two years to make recommendations.

When Congress was debating the farm bill, dairy farmers were receiving relatively high prices for milk. But administration and congressional deliberations over the agriculture budget have taken place during the steep price decline and while economists predicted a rough road ahead.

While a commission will not have time to save farmers from the current decline, long-term changes will probably have to wait until it makes recommendations, as Congress rarely steps into such turbid waters before such a panel has completed its work.

A spokesman for the USDA, Caleb Weaver, said the department has not identified any funds for the commission. James Miller, the department's under secretary for farm and foreign agricultural services, told the House Agriculture Committee last week that officials are still awaiting an appropriation from Congress to create the commission, although Agriculture Secretary Tom Vilsack said in New Hampshire earlier this month that he was directing his staff to start assembling the group.

When asked by the Watertown Daily Times in March when he planned to appoint the commission, Mr. Vilsack said, "I'm sure going to do this on a timely basis."

Dairy industry groups have not made the commission a high priority. The National Milk Producers Federation, representing farmer-owned bargaining cooperatives, has focused on more immediate measures such as increasing government support prices; a spokesman said earlier this year that he doubted creating the commission would be part of the USDA's response to the crisis.

But the congressional mandate came up Wednesday at the Agriculture Committee's hearing on the state of the dairy economy. Lawmakers said any response to the situation will require both short-term and long-term answers. And committee Chairman Rep. Collin C. Peterson, D-Minn., said he hopes for more hearings this month, which will give lawmakers another opportunity to talk about it.

Dairy farmers are struggling through a historic price collapse that has sent the prices they receive for milk well below the break-even level. Even the most efficient farms will lose money this year, economists say, and they predict prices will recover to only around $15 per 100 pounds next year, which is still below the cost of production in New York.

The commission could look at a wide range of issues, including whether consolidation in the industry has eroded farmers' bargaining power and kept prices lower. The panel may also look at ways to increase consumer demand for milk, including changing nutritional standards that keep milk bottlers from adding milk solids into their product. California, not part of the federal system, allows such additions.

Sen. Kirsten E. Gillibrand, D-N.Y., who helped push for the commission as a member of the House Agriculture Committee, plans to revisit the issue this week, said her spokeswoman, Bethany Lesser. The senator will call on the USDA to find money in its general budget to pay for the commission, Ms. Lesser said.

A spokesman for Rep. Jim Costa, D-Calif., who led the effort to include the commission in the farm bill, is working with the Senate Appropriations Committee to have funding included in the Senate bill before it reaches a vote in the full Senate, a spokesman said. If that does not happen, he will urge the USDA to find the money elsewhere in its budget, he said.

Lawmakers are also looking for measures that could be put in place well ahead of a commission's work. Those include increased government payments during low price cycles and possibly speeding the slaughter of cows to reduce the milk supply.

Rep. Scott Murphy, D-Glens Falls, one of just two New Yorkers on the House Agriculture Committee, discussed some of those issues at a press conference in Saratoga Springs last week, where he unveiled ideas to help New York farmers.