Chet Brokaw has an article for the Associated Press online in which US Department of Agriculture (USDA) Secretary Vilsack is advocating for a change in the structure of the dairy industry. This comes days after conferees for the conference committee on the agricultural appropriations bill agreed to provide $350 million to the struggling industry.In good years the industry survives on the high dairy prices and consumer demand—particularly from growing nations. However, with the downturn of the economy came a downturn in dairy demand “and wholesale mild prices began plummeting last fall.” Adding more pain to the situation, both feed prices and fuel prices increased over this same time period. This puts many famers in the painful position where they have milk to sell, but at the current prices selling the milk wouldn’t cover expenses.
This reality prompted Vilsack to make the following statement during a visit to South Dakota, ‘“I think really what will be next in line is a longer term discussion about whether or not we need to make structural changes in the way the dairy industry is currently operated so we no longer have these rather stark contrasts between boom and bust [.]”’
Vilsack still wants to deliver the federal aid promised the farmers. In the conference bill the USDA has $290 million to spend on dairy farmers. However, how that money is spent has turned into a battle between small dairy farms from the east coast and larger operations from the west. The $290 million will be in direct support, the formula to distribute the money is gaining a lot of attention from the industry. Vilsack hopes to get as much money in the hands of farmers as soon as possible.
The secretary also said he expects the Agriculture Department to look at its price support and marketing programs to see if changes can be made to help stabilize prices."We need to figure out what changes, if any, we need to make to our support programs, to our marketing programs, to who's included in those programs, to see if there is any way we can create greater stability," Vilsack said.
Currently, to help combat prices, some cows are being taken out of production. Both the National Milk Producers federation uses member contributions to buy out some herds, as does the Dairy Farmers of America.
Of course, the list of agriculture problems the secretary has to deal with is growing quite large, from food safety, to dealing with the decline in pork product consumption in the face of the H1N1 swine flu, not to mention trade barriers the secretary is working to eliminate.
Regardless of those other issues, dairy farmers across the country are waiting to find out how that $290 million in direct spending will be doled out.
To read the Associated Press story click here.
Posted: 10/06/09
