USDA ups pay for excess dairy
WASHINGTON — The U.S. Department of Agriculture announced a bigger-than-expected increase in the price it pays for excess dairy products, a move that pleased farm groups and lawmakers urging help for struggling dairy farmers.
The price for nonfat dry milk will climb from 80 cents to 92 cents per pound, and the price for block cheddar cheese will climb from $1.13 per pound to $1.31. The increase takes effect this month and lasts until October.
The USDA estimated that the move will boost dairy farmers' revenue by $243 million nationwide.
"The Obama administration is committed to pursuing all options to help dairy producers," Agriculture Secretary Tom Vilsack said in a press release. "The price increase announced today will provide immediate relief to dairy farmers around the country and keep many on the farm while they weather one of the worst dairy crises in decades."
The increase is greater than requested by the nation's main lobbying group for dairy farmers, the National Milk Producers Federation. Sen. Charles E. Schumer, D-N.Y., said after a Wednesday meeting with Mr. Vilsack that the agriculture secretary had hinted at a bigger increase than the NMPF or he and other lawmakers were seeking.
"Secretary Vilsack and his staff have been extremely responsive to the crisis on dairy farms, and will look forward to continue working with the USDA to help address the pain that producers are feeling," said Jerome Kozak, chief executive officer of the NMPF, which represents dairy farmers' bargaining cooperatives.
Milk prices have been falling since last year, taking an especially sharp dive this February and March. They have bottomed out between $10 and $12 per 100 pounds, while the cost of production in many areas is closer to $20 per 100 pounds, economists say.
Mr. Schumer and Sen. Kirsten E. Gillibrand, D-N.Y., who also attended Wednesday's meeting, praised the USDA's move.
"Our dairy farmers are in real trouble," Mr. Schumer said. "I am glad that the secretary of agriculture heard our pleas and commend him for taking this important action. This won't solve the problem, but it certainly will help, and I will continue to fight for higher prices for our dairy farmers."
"During these tough economic times, this increase will bring some much needed relief for our farmers," Mrs. Gillibrand said.
Mrs. Gillibrand, a member of the Senate Agriculture Committee, added, however, that raising support prices is a temporary measure and that, in her view, more fundamental changes are needed in the way the government sets milk prices.
While the increase exceeded farm groups' demands, the USDA still faces pressure to take or endorse more aggressive action, such as doubling payment rates under the Milk Income Loss Contract program, which pays farmers when prices fall below a federal target. Mrs. Gillibrand and Mr. Schumer support that idea.
Others have called on the USDA to set a floor price of $18 per 100 pounds on milk or to more fully take into account farmers' production costs when setting minimum prices plants must pay for milk.
