Lawmakers wrangle over dairy money
October 1, 2009
Lawmakers in Congress from eastern and western states disagreed Thursday on how to distribute $350 million in federal money designated to help dairy farmers.
Under an agreement set Wednesday, $60 million would go to buy surplus dairy products, but there were no details on how to dole out the remaining $290 million.
Walter Bradley, government and business affairs director for the Dairy Farmers of America in Clovis, said Western lawmakers and dairy owners would prefer the money to go to buying more dairy products.
But Eastern lawmakers want price support. The price support would pay dairy farmers when the price they get for their milk drops.
“If you put the money into price support, the price support has caps on it for each dairy,” Bradley said.
The government would stop paying dairy farmers after they produced 3 million pounds a month, which Bradley says amounts to supporting about 200 cows. The average New Mexico dairy size is 2,000 cows.
With Eastern states having much smaller dairies — 500 cows is the largest single dairy population in Pennsylvania — those states benefit much more from price support, Bradley said.
Sen. Chuck Schumer, D-N.Y., has said he is worried the money would be allocated on a per-cow basis, a formula that is less advantageous for New York dairy farmers, who tend to have fewer cattle.
However, Bradley said buying dairy products would benefit all dairy owners equally.
“You reduce the inventory, which will increase the price that the dairyman gets for his milk; it’s supply and demand,” he said.
Bradley said the reduction in supply wouldn’t necessarily make costs in stores go up. He said the store price is already well above what dairy farmers are paid, and it would take a lot to increase that retail cost.
Dairy owners’ income has no connection to what milk processors charge for their finished product, Bradley said.
Sen. Bernie Sanders, the Vermont independent who helped to craft the dairy legislation, said there is always an element of regional bias in dairy issues, but added that he is confident the compromise will help dairy farmers nationwide.