Schumer: Major Proposal Unveiled Today Could Bring Ny Dairy Farmers $93 Million

US Senator Charles E. Schumer today unveiled a new proposal with a bipartisan coalition in Congress including Reps. Tom Reynolds and John McHugh that would send New York dairy farmers $53 million more a year than the current MILC program. Schumer said today that the new proposal would act like a regional dairy pact when milk prices fall and would serve as an alternative to the current MILC program that could boost the income of New Yorks dairy farmers by $93 million annually and save the federal government hundreds of millions of dollars.

"The MILC program had good intentions and brought New York's milk farmers millions of dollars, but it should have done more," Schumer said. "We need a new system that guarantees farmers fair prices for their milk and that's just what this new program would do.

Since 2001, milk prices have fluctuated significantly on a monthly basis, hitting a low of $12.96 per hundred weight of Class I Milk in May 2003. The current price, $24.38 is up almost $6 from April and analysis of prices since 2001 have varied on average $0.68 month to month. For example, from December 2003 to January 2004, the price dropped by $1.99 from $17.09 to $15.10, a drop of 12%. While prices have been high of late, the milk market is extremely volatile and large price swings that lead to dangerously low prices remain a real threat to dairy farms across New York.

To protect New York's dairy farmers, Schumer will join Senator Arlen Specter of Pennsylvania in introducing the National Dairy Equity Act (NDEA) that will allow states to choose between continuing to participate in the MILC program or joining regional marketing areas that would ensure that farmers in the region received substantial benefits to help them weather periods of low prices. The NDEA would rely on price triggers; when the price of milk falls below the trigger price, farmers would start to receive support in the form of payments under the program.

Payments to dairy farmers in these areas would be funded through assessments on processors that would then be redistributed through a national central fund and supplemented with a very small percentage of federal funds. Payments to producers would be equal to either what the region paid into the central fund or 50% of the difference between the trigger price and the price of class I milk in the region whichever is greater.

To illustrate the potential impact of the proposed program, Schumer today released a new study showing that New Yorks dairy farmers from almost every county in the state would receive on average $93 million annually or $53 million more than under the MILC program. Specifically, the study found that:

" 755 dairy farmers in the Capital Region could receive $9.5 million annually $5.4 million more than under the current MILC program;

" 948 dairy farmers in Central New York could receive $11.7 million annually $6.7 million more than under the current MILC program;

" 861 dairy farmers in the Rochester/Finger Lakes area could receive $15.8 million annually $9.1 million more than under the current MILC program;

" 267 dairy farmers in the Hudson Valley could receive $3.2 million annually $1.9 million more than under the current MILC program;

" 1,706 dairy farmers in the North Country could receive $20 million annually $11.4 million more than under the current MILC program;

" 1415 dairy farmers in the Southern Tier could receive $12.6 million annually $7.2 million more than under the current MILC program;

" 1144 dairy farmers in Western New York could receive $20.7 million annually $11.8 million more than under the current MILC program.

[For countybycounty breakdowns please see attached chart.]

"When it comes to the milk market, there are various conditions we simply cannot control. We can, however, set up a program that helps farmers weather the terrible financial risks caused by these often stormy prices," Schumer said. "The regional dairy pricing system that this new law would create will pay farmers a fair price so they can make a living. It's something we can do and it's something we should do. The key now will be getting support for this program from the rest of the nation and we'll be fighting to do just that."

In addition to improving the incomes of New Yorks dairy farmers, Schumer said that the NDEA would save the government hundreds of millions of dollars per year more than $30 million in New York alone if it is used instead of MILC because under the NDEA milk processors pay the bulk of the fees paid to farmers when prices are low, instead of the government footing the whole cost.

Schumer, who has been dubbed the Brooklyn Farmer, also cosponsored a measure in May to protect local dairy farmers from cheap foreign imports of MPC, a cheese substitute that cost New Yorks dairy farmers $96 million last year, by applying a tariff of 71 to 98 cents per pound of MPC.

Please see attached study for countybycounty impacts and more information.