Five dairy farmers representing Pennsylvania, New York, Wisconsin, Minnesota and California held a press conference on Monday to help bring awareness to the dropping milk price and the rising cost of inputs.
It comes at a time when the price for class I milk dropped more than $5 since September, along with a $7.20 drop for class IV milk. To compound the situation, dairy farmers in Pennsylvania can expect a 25 to 35 percent increase this spring in the cost it takes to produce milk. In January, area dairy farmers received around $22 per hundredweight for their milk, and Arden Tewksbury of Pennsylvania Progressive Agriculture Organization in Meshoppen said it costs Pennsylvania farmers $27.59 to produce 100 pounds of milk.
In January, Tewksbury predicted milk prices to drop $4 per hundredweight this spring. If that happens, the price farmers would receive for their milk would drop to $18, while the cost to produce it would jump to over $30.
“It may be worse than we predicted,” Tewksbury said. “Dairy farmers are not receiving a realistic price that covers the average cost of producing milk.”
Price-support programs, such as the Milk Income Loss Contract (MILC), are ineffective, according to Wisconsin dairy farmer Joel Greeno.
“If milk prices were to drop to levels that the MILC would kick in, I would be losing $3,375 a month,” he said. “It would be pretty hard to pay the bills on that.”
Minnesota dairy farmer LoriJayne Grahn said the cost of production factor is critical because dairy farmers have no ability to raise their prices. The answer, she said, lies in the cost of production, and the matter almost became a reality last year when U.S. Sens. Robert Casey, D-Scranton, and Arlen Specter, R-Philadelphia, introduced Senate Bill 1722.
Tewksbury said the bill incorporates national cost of production into the pricing formula, eliminates hauling charges for farmers and implements a supply management program that can kick in when milk exports equal imports. The bill has sat in the Senate Committee on Agriculture, Nutrition and Forestry since last June.
“Presently, the value of milk across the country is basically the same, and dairy farmers from every state agree we need a new pricing formula,” Tewksbury said. “We’re hoping we can get bill 1722 moving or something similar to it.”
Casey also attempted to include the cost of production as an amendment to the 2008 Farm Bill but failed to garner support from his fellow senators.