For generations, American dairy farmers have lived with a milk pricing system that is detached from reality. In the simplest terms, the price they receive for their milk bears almost no relation to the cost of production. This results in extended periods when farmers actually lose money every time they send milk to the processing plant.
Now is one of those times. The severe drought this past summer in the Midwest decimated the corn crop and has sent grain prices through the roof. Yet the Federal Milk Marketing Order, the law that tells the U.S. Department of Agriculture how to price milk, lumbers along like an obstinate nag wearing blinders.
The situation has grown so bad that a bipartisan group of U.S. senators sent a letter in late September to Agriculture Secretary Tom Vilsack, asking him to review the floor price for raw milk. Vilsack has yet to intervene, and dairy farmers continue to hemorrhage money.
Yet there are other leaders uniquely empowered to help farmers. They are known as the men and women in Congress. About every four years, they debate and re-authorize the Farm Bill, an omnibus piece of legislation that encompasses everything from conservation to corn subsidies.
Dairy farmers have been trying for years to secure provisions that would reduce the wild price swings in milk and give them a little stability. The 2012 Farm Bill had been their best chance yet.
In a version passed by the Senate in June, a new law called the Dairy Security Act would provide margin insurance and implement a supply control program, which would help prevent an oversupply of milk that collapses prices. The same law was contained in a version of the Farm Bill that passed the House Agriculture Committee .
But that’s where it stalled. Citing irreconcilable differences on budget cuts to the food-stamp program (also part of the Farm Bill), the Speaker of the House, John Boehner, announced that he would not bring the bill to a vote before it expired on September 30.
More specifically, Boehner indicated that the House wouldn’t vote on the Farm Bill until after the presidential election. With the more pressing business of the “fiscal cliff,” Congress delayed passage of new Farm Bill legislation and renewed current law through Sept. 30, 2013.
The impacts of this legislative neglect are already starting to appear. In Bridport, Vermont, Leonard Barrett has decided to end his 40-year career as a dairy farmer, telling the Addison County Independent that he was “forced out” by the combination of rising production costs and stagnant milk prices. “I’m very disappointed with our people in Washington, D.C.,” he said.
With stories like Barrett’s, it isn’t shocking that Vermont has 22 fewer dairy farms than it did last year. In Florida, Mike and Freda Carey are holding on to the last dairy farm in Polk County, hoping the situation improves enough to pass the operation on to one of their four children.
Given the current outlook, it doesn’t seem likely. “It’s pretty hard to keep working when you’re losing $500 to $600 a day,” Mike told The News Chief , a newspaper in Winterhaven.
In other parts of the country, struggling dairy farmers are feeding candy, ice cream sprinkles and hot cocoa mix to their cows as a way to save money – never mind that the animals evolved to eat grass. To make matters worse, November was the first month farmers didn’t receive a MILC payment, costing them precious thousands of dollars.
Instead of leaders in Congress, it seems we have avoiders. Strategic avoidance may be part of the toolkit of our representatives, but it implies they know precisely when an issue is ripe for resolution. Wait too long, however, and the opportunity spoils. This is the point Congress is nearing with the Farm Bill. If they defer their leadership long enough, consumers will suffer and there won’t be many dairy farms left to save. PD
Kirk Kardashian is a senior writer at the Tuck School of Business at Dartmouth and the author of “Milk Money: Cash, Cows, and the Death of the American Dairy Farm.”
Kirk Kardashian
Senior Writer
Tuck School of Business at Dartmouth
