A Gloomy Season for Dairy Farmers
Published: October 7, 2012
Last week began without a farm bill, a legislative lapse of shameful proportions. Since 1949, the bill has always been renewed, but not this year. Even so, most of the 2012 crop is still covered by loans, insurance programs and commodity supports until the end of the year — with one important exception.
That exception is dairy farmers. When the farm bill expired, so did the Milk Income Loss Contract Program, which pays dairy farmers when milk prices, which are always volatile, fall below a set level. The payment is also adjusted to the price of feed, which has been high, thanks to record corn prices, and will be much higher after this year’s nationwide drought.
The program was designed to help small dairy operations, the kind that are prevalent in the Northeast. Typically, in New York, the program can provide a farmer with as much as 10 percent of his income. For all too many farmers — caught between diminishing demand for milk, historically low milk prices and historically high grain prices — that is the difference between bare survival and certain insolvency.
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Image courtesy of FarmBillFacts.org.