High fuel costs, severe grain and hay shortages and a stagnant milk price are causing dairy farmers to get out of the business, according to U.S. Sen. Kirsten Gillibrand.
The Democrat from New York Tuesday announced the Gillibrand-Collins Dairy Pricing Reform Act, a plan to combat rising costs for dairy farmers by altering USDA's dairy pricing policies.
"The squeeze facing our dairy farmers is driving them out of business and preventing them from growing to meet demand," Sen. Gillibrand noted. "We can't afford any more delay in Congress. We need to take action now to set the environment for our dairy farmers to thrive."
Gillibrand's plan is driven by the more than 600,000 dairy cows that call her state of New York home. She points the state's nearly 65,000-cow selloff from 2002 to 2012 as the result of "flawed dairy policy."
Senator says dairy farmers are squeezed by current legislation; vows to support reforms suited to small and mid-size dairies
Gillibrand's legislation would require the USDA to conduct hearings to restructure dairy pricing and study new methods for determining pricing, such as shifting from a four-class system to a two-class system.
Plan coincides with Senator's other offerings
The legislation, intended to be part of the farm bill, will work in concert with three other components of Gillibrand's dairy agenda: The Dairy Income Fairness Act, mandatory National Ag Statistics Service cold storage reporting and the Democracy for Dairy Producers Act.
The Dairy Income Fairness Act would favor smaller farms by guaranteeing a $6.50 margin – the cost of milk minus the cost of feed – for farms with fewer than 200 cows.
DIFA would also exempt the first 200 cows in an operation from "supply management" – a plan supported by the National Milk Producers Federation that would allow the USDA to periodically limit milk supplies to drive prices. The Milk Income Loss Contract program also would be extended while the USDA establishes a new dairy program.
Gillibrand is pushing a change in how NASS reports cold storage inventories, too. The provision, which was offered in last summer's Senate Farm Bill debates, would allow USDA to audit cold storage inventories of dairy products to avoid volatility in trading and minimize inaccurate inventory inflation.
Lastly, the Democracy for Dairy Producers Act, which was also rolled into the Senate Farm Bill, would increase transparency between cooperatives and members by providing farmers with written notices of votes and require that any changes in policy on milk marketing be publicized heavily.
Gillibrand intends to introduce the Dairy Pricing Reform Act with Sen. Susan Collins, R-Maine, when the Senate returns from break April 8.