More Dairy Farms Disappear if Price Formula not Changed

September 17, 1999

The National Grange says more dairy farms will be lost if Congress fails to approve a milk pricing formula that probably means higher milk prices for farmers. Grange President Kermit Richardson also believes regional dairy compacts are needed to keep dairy farms profitable.

Richardson's call for action comes as a Senate-House conference committee is struggling to get into position to iron out differences in two agricultural appropriations bills and the House is poised to deliberate milk pricing legislation.

The milk pricing issue is of special importance, because USDA's final rule on revising milk marketing orders goes into effect Oct. 1 with a pricing provision most milk producers don't like. Most producers favor the option the House will consider; it is expected that option means higher milk prices for farmers.

Richardson predicts farmers' income will be reduced by $147 million a year if the USDA rule takes effect. "This amendment (to replace the USDA option) may be one of the last opportunities that we have to keep this economic disaster from happening," he says.

"If we lose the authority to form regional compacts," he adds, "many dairy farms in highly populated regions of the Northeast and Southeast will become unprofitable, and local consumers will lose the ability to purchase fresh, locally produced milk."

The appropriations conference committee may be asked to consider an extension of the Northeast Dairy Compact and authorization of a compact that would include almost all southern states. Compacts have the authority to set farm milk prices higher than the federal order system allows.

"I know how difficult it is to enact this type of legislation," says Richardson, "but I also know firsthand the benefits that the Northeast Dairy Compact provides for both dairy farmers and consumers. Since enactment of the (compact), prices for fluid milk in the New England region have been stable, consumers have benefitted from a reliable supply of locally produced fluid milk, and food assistance programs...have been unaffected. This successful program deserves to be reauthorized."