One more time, Senator Kirsten Gillibrand (D-NY) deserves a big thank you for her efforts to improve prices paid to all dairy farmers in the USA.
On Wednesday December 1, Senator Gillibrand was joined by Senators Pat Leahy (D-VT), and Senator Susan Collins (R-ME) in introducing the new dairy bill identified as the Dairy Pricing Opportunity Act.
Many times these three Senators were in the forefront for improving prices to all dairy farmers. However, the bill continues to call for changes in the formula that establishes the price for Class I milk which is milk for drinking. The end result of this effort must be expanded. This proposed formula would only return 70 cents for Class I milk. With the national average of approximately 30% usage of Class I milk this would mean that the average dairy farmer receives 21 cents per hundred weight (cwt.) in their milk check.
Mr. Dairy Farmer, has anyone else told you this fact? Don’t be misled that 21 cents per cwt. would help dairy farmers a little bit. But it comes extremely short of even coming close to covering the dairy farmers’ cost of production.
Where is such a formula? The appropriate formula is contained in the Federal Milk Marketing Improvement Act, the former Specter-Casey bill. This formula would allow all milk used to manufacture dairy products to be the same price. Currently this milk is classified as Class II, III and IV. The Federal Milk Marketing Improvement Act would classify these classes into one class: Class II.
Some people will argue you can’t combine these classes together. Why not?
Have you looked at the Class prices for manufactured milk in the November calculations? All three classes, II, III and IV are over $18 per cwt. You must argue with anyone that this would help dairy farmers tremendously.
In the Federal Milk Marketing Improvement Act all milk used for manufacturing purposes will be higher than under the present formula because we will use the national average cost of production to determine the value of manufactured milk. This will raise the prices paid to all dairy farmers. We use the USDA prices for the average cost of production, which shows for the last several years, the loss to all dairy farmers annually has been between $10 and $12 billion dollars.
The Class I price will be determined by adding current Class I differentials to the manufactured value of milk, and this would give the average dairy farmer an opportunity to stay in business.
Yes, a 21 cent improvement in the Class I price would be helpful, but common sense should tell you that that will not solve our dairy farmers’ problems. However, to their credit going to Senators Gillibrand, Leahy and Collins, their new bill mandates the Secretary of Agriculture conduct milk hearings within six months all across the USA, which would determine how things really are on the farm.
Remember the bill mandates that the Secretary of Agriculture Tom Vilsack has these hearings. This is something that Pro-Ag has been calling for for many years. I hope everyone calls the Secretary’s office to be sure these hearings are held.
A few years ago I heard the Secretary of Agriculture say, “No matter what anyone says, I have the final say in what goes in our school lunch program.” However, the Secretary would not allow whole milk back in our schools.
Okay Mr. Secretary. Let’s correct two things. Let’s get whole milk back in our schools, both flavored and unflavored. Let’s have these hearings as soon as possible. Remember, each year the dairy farmers are losing between $10 and $12 billion dollars, and rural America is losing $60 billion dollars per year. Let’s get the ball rolling Mr. Secretary.
Arden Tewksbury/Pro-Ag can be reached at 570-833-5776.
