SOMERVILLE, Mass. — 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.
Petition
Farm Aid has organized a petition to call on Secretary of Agriculture Tom Vilsack to take action by setting a floor price for milk that reflects the cost of production, protecting the livelihoods of dairy farmers and consumer access to fresh, local dairy products.
Farm Aid will personally deliver the petition to Vilsack June 2.
Dairy farmers have been hit with a catastrophic combination of factors beyond their control.
Struggling
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 announced 2009 first quarter earnings that are up from the same period last year.
Dean Foods
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.”
Some smaller dairies that grass feed their cows in a more traditional method should consider offering herdshare contracts to consumers and consumer groups to meet raw milk demand. Prices are $5 a gallon or more and make the dairy much more profitable. Consumers are demanding raw milk for its health benefits more and more.