Milk prices still spoiling farmer's profits
Story Created:
Sep 16, 2009 at 6:18 PM EDT
Story Updated:
Sep 16, 2009 at 9:17 PM EDT
DANUBE, NY (WKTV) - Dairy farmers have been complaining for months about a decline in revenue directly attributed to low prices they are paid for milk. Farmers receive federal subsidies in addition to money paid by processors but many have complained subsidies are similar to those of the 1970's and with rising costs of equipment and fuel small farmers are reeling.
Several farmers say they are making half the revenue they did from milk as they did in 2008, "this is probably the worst I've ever seen it," said George Demeree of Danube, a farmer of 54 years. He recently turned his dairy farm over to his son Tim who now produces organic milk.
Demeree offered his own proposal for fixing the pricing dilemma, "this is what the dairy farmer needs to do: get into position where they can get cost of production and we have supply management, that way we would only produce the amount of milk that is needed."
State Senator Jim Seward (R-51) recently sent a letter and spoke with Attorney General Andrew Cuomo about the milk pricing problem plaguing many in his largely rural senatorial district, "when agriculture and dairy is doing well, I think our upstate economy will be doing a heck of a lot better," said Seward.
In the letter, he cites a 40-50% drop in prices farmers are paid as large processors "such as Dean Foods have reported a 31 percent gain in profits during the first half of this year."
In response Dean Foods' Vice President of Corporate Communications Marguerite Copel said:
"It's important to note that Dean Foods is only one of many processors in the dairy industry, and processors are only one part of a complex system that includes producers, cooperatives, government agencies, and retailers. To suggest that we control the market, or that we are the cause of low milk prices, makes no sense. In fact, since we produce drinking milk, we are paying the highest possible price under the current system, from 20% to 50% more than what cheese processors pay. Our recent profits are a result of many factors, only one of which is commodity prices. They can also be attributed to enhanced operating efficiencies, successful marketing of new products, increases in fluid milk volume and several strategic acquisitions."
Seward says he expects to learn whether or not an investigation into milk prices will take place within 1-2 months. He's also called for Governor David Paterson to use some stimulus money as an immediate cash infusion to dairy farmers.
At the federal level, the Senate Judiciary Committee is expected to hold hearings on the matter in the near future. According to the Oneida County Farm Bureau, several congressional lawmakers from upstate including Congressman Michael Arcuri (D-24th) Dan Maffei (D-25th) and U.S. Senator Kirsten Gillibrand have spoken with farmers recently about this issue.
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