Milk price program finds support in Congress

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(Host) Vermont’s dairy farmers received a double dose of good news from Congress this week. A program that creates a safety net for milk prices has been included in the 2007 Farm Bill and lawmakers in Washington finally approved a disaster relief bill to help farmers deal with the wet conditions they experienced last spring.

VPR’s Bob Kinzel reports:

(Kinzel) The disaster relief money got delayed because it became entangled in a series of federal budget deficit battles and a number of Iraq War supplemental spending bills.

Extremely wet conditions last spring caused serious crop losses for many farmers and the situation also resulted in lower milk production. Agriculture Secretary Roger Albee says dairy farmers could be eligible for as much as $50 million in federal disaster relief:

(Albee) “Feed prices have skyrocketed here so they had a situation where they had poor feed forage here, and yet they had to pay very high grain prices because of the ethanol corn demand in the west.”

(Kinzel) Congress also extended a program that establishes a floor price for milk. Albee says this program creates a very important safety net for many farmers:

(Albee) “The price swings that take place on dairy pricing are becoming extremely wide both on upper and lower ends, mainly because of the large production taking place in parts of the country like the west where they have 20,000 cow units.”

(Kinzel) Currently milk prices are fairly high. Bob Wellington, an economist at AgriMark, says a surging international demand for non-fat powdered milk products is a major reason why:

(Wellington) “However once prices go into their roller coaster cycle – which at this point we’re looking at probably it could be 2008 but more likely 2009 – so within less than two years we’re probably going to see prices low again. And we need some kind of safety net in place and this will allow us to construct a safety net.”

(Kinzel) Congressman Peter Welch led the effort in the U.S. House to keep the milk pricing program. He says it’s critical to maintain a unified coalition of farm states in Congress:

(Welch) “You know [in] dairy traditionally and agriculture traditionally there’s been a lot of regional differences. And I think more and more farmers are starting understand – as well as legislators from agricultural areas – that we’ve got to be unified on the goal of maintaining local agricultural production.”

(Kinzel) Welch says he’d like to see Congress make some major changes to the overall federal milk pricing system but he says that’s unlikely to happen until some of the strong regional differences on this issue can be resolved.

For VPR news, I’m Bob Kinzel in Montpelier.

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