Welcome!

If you're going to know something about me, let it be this: I love cows.



I am also a proud participant in the dairy industry, and I think we have a great story to tell about our farm businesses, our animals, and our product (MILK!).



So welcome to the conversation; I'm devoted to dairy, and happy to answer any questions you may have.



Tuesday, December 4, 2012

Frustrated about MILC

   Greetings from our booth at the NY Farm Bureau annual meeting, where I've been sitting since 11:30am (after a frantic drive in from Wyoming county) typing up a farm report since no one seems to notice us down here at the faaaaaar end of the exhibit hall. Maybe it's because attendees are in session, or maybe because they literally can't see our pretty new display since the hall is getting darker as night falls and we're soon to be lit only by a lamppost 6 feet away and Christmas lights on plants in the lobby. Either way, I found myself between thoughts on the report and checking facebook, (sue me, it happens), where I found a link to an article referencing pending financial hardship for NY dairy farms if we don't see a new Farm Bill passed by congress in fairly short order.
   I'm not overly bothered by some of the assumptions used in the article- it's fair to assume that on the off chance no bill is passed and we revert to the method of milk pricing used in the 1930's (which would happen without a new bill), and the government starts buying up milk using the old formulas (which I suspect is unlikely to happen), the cost of dairy products to consumers could increase to the point of diminishing demand.
   A bigger contention is that they really harp on the loss of the price support program- Milk Income Loss Contract (MILC) which sets a floor on milk price paid to farmers on up to 2 million pounds of milk or so per year. What that means is that if you milk about 100 cows, all of your milk is covered, whereas if you milk 200 cows, (NY's average dairy farm size is a little less than 200 cows) only half of your milk production would be protected. So if you happen to be a larger family farm (97% of all dairy farms are family owned) then you're not getting much help from the program. And whether we want to admit it or not, 75% of our milk comes from the largest 25% of dairies- so for the relatively high dollar amount that goes out in MILC payments, it's not supporting the production of a whole lot of milk, although it does get paid to a large number of farms.
   Since it's my personal blog, I get to state my personal opinion- and to me, MILC unfairly supports small farms and size is not the sole indicator of profitability of a dairy farm. Please don't take this as saying there is anything wrong with small farms- I believe there is room for everyone in the milk production arena who can operate profitably; but in my experience, MILC payments support some unprofitable farms when economics say that farm shouldn't be in business anymore (for the time being, I'll leave untouched the topic of overall milk production economics and milk pricing being a big, ugly, inadequate system). MILC also fails to address that milk price alone doesn't determine if a farm is profitable. With the high cost of corn and other crops that are typically used to feed cows, the cost of making milk is up significantly, so it's harder to make a profit even though milk prices are high compared to the average price over time. So technically, even if dairy farms are losing money right now, MILC wouldn't kick in and help them until the price of milk drops another couple dollars. Not actually all that helpful.
   So basically, we need a new Farm Bill, one that is renamed the "Social Welfare Bill" to reflect that 90% of the money that goes to funding it is paid out in WIC and Food Stamps, and we need a better type of price support that is equally beneficial to small and large farms. In this time of high feed cost, everyone buying grain and forages to feed their cows is in the same boat, and size doesn't help- whether you're losing $1 a day on each of your 100 cows or $1 a day on each of your 1,000 cows- you're having a hard time. 
  And finally, can we PLEASE stop acting like there's something wrong with having a large dairy farm. There are savvy families running great dairy farms of all sizes in this state, and they all need access to support from disasterous prices.
   I'm sure in the final hour, congress will pass a bill and we will avoid 1930's milk pricing. Even so, MILC can and should go away, and a better program will take it's place. And eventually we will have appropriate milk pricing. And eventually HSUS will go away. And eventually everyone will milk Brown Swiss.
It's good to be optimistic.

No comments:

Post a Comment