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Dairy panel pins hopes on Washington D.C. for price hike

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Posted on July 30, 2009 |
By Kathryn Flagg



By KATHRYN FLAGG
ADDISON COUNTY — A Vermont Milk Commission meeting last week ended in much the same way that many conversations about Vermont’s flagging dairy industry have ended this year: with state officials looking once again to Washington.

The commission’s July 23 meeting culminated with a resolution thanking Vermont’s Congressional delegation for its work in trying to increase prices paid to dairy farmers, and asking those delegates to convey to the White House and the Office of Management and Budget the “emergency nature of the needed aid” for dairy farmers.

The commission also planned to convene a meeting with dairy processors — such as Hood, Cabot, Ben and Jerry’s and the St. Albans Co-Op — to discuss how to support farmers who are currently earning less than it costs them to produce milk.

Right now, according to Vermont Secretary of Agriculture Roger Allbee, Vermont dairy farmers are losing approximately $100 per cow a month as milk prices hover near $12 per hundredweight, several dollars below the cost of production. The Vermont Agency of Agriculture estimates low milk prices have cost the state $200 million in lost economic activity this year.

What Allbee, who chairs the Vermont Milk Commission, and other members of the commission are hoping for is short-term federal intervention.

Allbee wants to see U.S. Department of Agriculture Secretary Tom Vilsack raise the “support price” for dairy products that the government buys, but said the question, of course, comes down to finding the money to support farmers.

“It’s quite clear that Mr. Vilsack understands the seriousness of the situation,” Allbee said. “He clearly understands it’s a crisis out there, and that action is needed.”

But turning to the federal government — both for short-term support and long-term solutions — had some in attendance at the commission’s meeting frustrated.

For five hours, said Leicester resident and former organic dairy farmer James Maroney, the commission covered the “same old ground.”

Based on stories like one from an Orleans farmer losing $1.2 million a year, Maroney gives the dairy industry in Vermont 30 to 60 days before he says the industry is going to collapse completely.

“I don’t think that the farms are going to fail one by one like they did in the past,” Maroney said.

He believes farmers are losing too much, too fast, and are hanging on by their fingertips.

“There comes a moment when you can’t do it any longer,” Maroney said.

Maroney said the conversation last week focused on fixing the pricing system, instead of what he says is the real problem driving volatile prices on the milk market: an oversupply of nine billion pounds of milk per year.

“I don’t think there was one person there who understands the problem, let alone the solution,” he said.

But Allbee said that when it comes to short-term relief, looking to the federal government for help is the only option Vermont has right now. The state, he said, doesn’t have money to dole out to struggling dairy farmers.

While his agency has been exploring options for getting farmers money through an emergency loan program, dairymen don’t, by and large, need more debt, Allbee said.

Given that last week’s meeting was just that — a meeting — and not an official hearing, the milk commission did not resume conversations about the controversial over-order premium they considered last fall. The plan would require processors to pay an additional premium on milk sold in Vermont. That money would then be pooled and distributed to Vermont dairy farmers.

While proponents of the over-order premium say that the additional funds would help farmers, opponents claim that higher prices would be passed on to Vermont grocers and eventually consumers.

But for now, Allbee said, the short-term focus is on finding temporary relief for dairy producers.

“The most immediate need is at the federal level to increase the support price,” he said. “We have to get the price up to farmers.”

And in Washington this week, lawmakers continued the work that, so far, has earned the praise of Allbee and the milk commission. Rep. Peter Welch, D-Vt., announced the formation a Congressional Dairy Farmers Caucus on Wednesday. The bipartisan group of more than 40 lawmakers draws members of Congress from every region of the country to advocate for dairy farmers.

For Vermont farmers, Allbee said, relief needs to come quickly. Since the beginning of the year, 32 dairy farms have gone out of business.

“The (pricing) system is broken,” Allbee said. “We need something done immediately.”

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