Owens treading into dairy industry
WASHINGTON — William L. Owens has taken plenty of heat from opponents in his congressional race for ducking tough questions. But on one controversy — alleged mischief in the milk business — he has come out farther in front of his rivals than he may have realized.
Mr. Owens stepped into a thorny debate when he launched a television ad promising to do something about price-fixing in the dairy industry.
At issue is the growing gap between what farmers receive for milk and what consumers pay for it. That spread has grown over the years as milk processors and especially retailers take a bigger piece of the resale dollar, economists say.
With his ad, filmed on a dairy farm in Clinton County, Mr. Owens has taken the side of farm groups that say price manipulation and collusion by dairy companies are partly to blame — not only for the spread between retail and farm level prices, but generally for why farmers are paid so little compared with the cost of producing milk.
"I think if you just read the newspapers, it's obvious," Mr. Owens said in an interview. "We're being urged by farmers to do this."
In telephone interviews, neither of Mr. Owens's opponents, Republican Dierdre K. Scozzafava nor Conservative Douglas L. Hoffman, shared Mr. Owens's view that the root of many farmers' woe is collusion in the industry.
To deliver on his promise, Mr. Owens risks alienating big players in the dairy industry, which is the biggest business in the 23rd Congressional District. Few politicians in the area, with the notable exception of state Sen. Darrel J. Aubertine, D-Cape Vincent, have been willing to complain about the activities of Dairy Farmers of America, the farmer-owned bargaining cooperative at the center of the controversy and the largest such organization in the country.
The political action committee for DFA is the biggest dairy industry contributor to members of Congress and other federal campaigns, giving $854,500 in the 2008 cycle. In addition, the organization most lawmakers consider the voice of dairy farmers — the National Milk Producers Federation — is closely aligned with DFA because the NMPF represents cooperatives.
Mr. Owens said he supports congressional calls for an investigation into dairy industry practices, following the lead of Sen. Charles E. Schumer, D-N.Y., and others. The Justice Department conducted a similar probe during the Bush administration, interviewing dozens of people in the industry, but declined to take action.
The Obama administration's Justice Department may take another look. Administration officials have promised to step up antitrust enforcement in agriculture and other areas.
In addition, Mr. Owens said, he supports revamping the government's system for setting milk prices so farmers receive a "fair price in relation to cost."
As a campaign issue, dairy shenanigans have not caught fire — despite the fact that the region has a few thousand dairy farmers and employs hundreds of people on farms and in plants that turn milk into cheese and yogurt. The Watertown Daily Times and other publications have reported often during the past few years about the allegations against DFA, its affiliates and some of its partners in milk processing.
In Northern New York, the alliance between DFA and Dairylea, and those co-ops' exclusive supply contracts with processors like Dean Foods and Kraft, have given farmers few other avenues for selling their milk. The lack of competition hurts farm-level prices, critics of the co-ops say.
DFA earlier this year agreed to pay the federal Commodity Futures Trading Commission $12 million to settle charges it manipulated the cheese market at the Chicago Mercantile Exchange in an effort to boost the prices it receives from processors. Yet the co-op has no legal obligation to pass those higher prices on to farmers; in some areas, in fact, DFA has paid farmers less than the federal minimum price for milk.
The Republican response to Mr. Owens's ad was to hammer the Democrat, with the help of milk metaphors, for trying to distract voters from issues such as the jobs he may or may not have helped create at the former Plattsburgh Air Force Base.
"It's no surprise that Bill Owens is no longer talking about jobs. After trying to milk fabricated job creation numbers for political gain, he's discovered that the credibility of his bogus claim has reached its expiration date," said Paul Lindsay, a spokesman for the Republican National Congressional Committee, on the day Mr. Owens's ad began running.
Ms. Scozzafava said "it's very possible" that price manipulation or price-fixing has occurred.
"There might be some truth to that," said Ms. Scozzafava, who added that some greater antitrust enforcement might be needed. Ultimately, she said, federal milk pricing needs to be more responsive to farmers' cost of production.
Ms. Scozzafava, who has represented farmers in the state Assembly for a decade and earns high praise from New York Farm Bureau, said she wasn't aware that DFA and Dean Foods now face a federal lawsuit alleging unfair competition in the region.
Mr. Hoffman said he supports higher government payments to farmers, temporarily, to ride out the current price crisis. "As a conservative, I'm certainly opposed to that in the long run. In the long run, I'd like to see a price at whatever the market will bear."
"It's just an unfair system all around for farmers," Mr. Hoffman said.
In his ad, Mr. Owens appears in the milk aisle of a supermarket and on the farm, talking about the price the farmer receives compared with what consumers pay. He promises to go after unfair practices in the industry to maintain dairy prices that are fair to both farmers and consumers.
But he also ran into a snafu: Mr. Owens borrowed the "Got Milk?" slogan and turned it into "Got Milk Money?" and a California milk promotion board has demanded he stop running it.
