The drastic drop in milk prices paid to farmers over the past year has led to an unprecedented crisis for dairy farmers who, on average, are being paid less than half the cost of production. Low prices and high production costs threaten to push nearly one-third of dairy farmers off their land over the next couple of months, strengthening corporate control of the dairy industry and severely impacting the health of local and regional economies nationwide.
“Setting a fair price for milk won’t fix all the problems that led to the current crisis, but it may be the only way to keep thousands of dairy farmers on their farms this year,” said Farm Aid board member Willie Nelson. “Unless Secretary Vilsack takes immediate action, huge areas of the United States may be left without any local dairy farms at all.”
Dairy farmers have been hit with a catastrophic combination of factors beyond their control. Farmers are struggling to pay bills from record high feed and fuel costs; adequate credit is increasingly impossible to come by; and the price of milk paid to farmers by processors collapsed a record 30 percent in January alone, and is currently down 50 percent since July 2008. In the meantime, the top dairy processors have recently announced 2009 first quarter earnings that are up from the same period last year. The top processor, Dean Foods, reported their first quarter earnings are more than double that of last year thanks in part to the plunging price Dean pays to its milk producers.
Under Section 608c (18) of the Agricultural Marketing Agreement Act of 1937, the Secretary of Agriculture is required to adjust the price of milk paid to farmers to “reflect the price of feeds, the available supplies of feeds, and other economic conditions which affect market supply and demand for milk and its products.” Farm Aid urges Secretary Vilsack to use this power to immediately institute a set price for milk that reflects the cost of production, keeping dairy farmers on their land.
“The U.S. has a tradition of local and regional milk distribution, making dairy farmers a base for strong local and regional economies. The loss of these farms will reduce spending in small businesses, investments in banks and shrink the community tax base. If we lose a third of our dairy farms in the next few months alone, imagine the impact on these economies by year’s end.” said Carolyn Mugar, executive director of Farm Aid. “As our independent family dairy farmers go out of business, our milk supply gets more consolidated by giant confinement dairies that do not contribute to our local economies or act of stewards of the land like our family farmers do.”
The petition can be accessed by going to this link.
I would like to disclose that I am (proud to be) interning at Farm Aid.