By Assemblyman Will Barclay
New York farmers are facing a dairy pricing crisis. The price for a gallon of milk has dropped below what it costs to produce. Some have characterized this economic situation as the stateÃ¢â‚¬â„¢s most difficult in modern dairy industry history. I propose the state intercede to keep the situation from worsening. I am urging the Governor to release $150 million in discretionary funds granted to New York through the American Recovery and Reinvestment Act to help farmers in their time of need.
The average price that dairy farmers received for their milk in June was $11.50 per hundredweight, which was a 40 cents per hundredweight slide from May and a $7.40 per hundredweight decrease from June of last year. As a result, dairy producers are being paid prices that are catastrophically below the price of production for their milk, regardless of the size of their operation. Economists predict that fluid milk prices may not increase for another year. A recent study conducted by Cornell University revealed that for dairy farmers in New York to just meet the average cost of production, they would need to receive $17 per hundredweight for their milk. New York farmers have been forced to either take on massive debt to cover their costs or go out of business.
Other lawmakers and I have written letters to Gov. Paterson in hopes that he will grant $150 million of federal stimulus money for dairy farmers. WeÃ¢â‚¬â„¢re asking $75 million be made available immediately and another $75 million in funding be set aside for the 2010 growing season in the likelihood that the dairy industry does not turn around this year. The funds are available through the $1 billion of discretionary funding the state received in February from the stimulus package. We propose that the money be granted the same way it was in 2006 when the state administered the successful Dairy Assistance Program, which utilized a milk production driven formula with a maximum cap per farm. In 2006, an eligible producer was reimbursed up to 4.8 million pounds. Based on this cap, and the expected rate of payment, the maximum amount a producer received was approximately $16,000, according to the Department of AgricultureÃ¢â‚¬â„¢s web site.
Providing assistance to our dairy farmers in these tough economic times may keep them afloat while they wait for the market to rebound. If our state delivers assistance to the dairy farmers in their time of need, it may be one of the best uses of the stimulus money thus far. I ardently urge the Governor and our state officials to earmark and facilitate this federal money for the farmers, as it will not only greatly help our dairy farmers but will resonate throughout our upstate economy, by lowering the cost of milk for families and schools. In addition, the assistance would also be in line with the purposes of stimulus funds, which include efforts to stabilize state economies and create or maintain jobs. I am hopeful the Governor will help the farmers in their time of need.
If you have any questions or comments on this or any other state issue, or if you would like to be added to my mailing list or receive my newsletter, please contact my office. My office can be reached by mail at 200 North Second Street, Fulton, New York 13069, by e-mail at [email protected] or by calling (315) 598-5185.