AUGUSTA, Maine — State agriculture officials traveled to Washington, D.C. last week to work with Maine’s congressional delegation and other officials about the demise of the 2008 Farm Bill, which expired Sept. 30, and its disastrous impact on Maine’s dairy farmers.
According to Maine Department of Agriculture, Conservation and Forestry (ACF) officials, the high cost of feed and fuel, coupled with the Midwest drought and a federal milk pricing system based on a speculative market system, have caused production costs to skyrocket for Maine dairy producers.
ACF officials last Monday informed state legislators who are members of the Joint Legislative Committee for Agriculture, Conservation and Forestry about the efforts being made at the federal level.
“We have discussed the very dire circumstances to our dairy industry, given the historic high prices of animal feed and fuel, and Maine’s continuing efforts to change the federal milk pricing system which has been devastating as a major driver of Maine’s rural economy,” said ACF Commissioner Walter Whitcomb. “The current system is completely out of context with the production issues we now face.”
Maine has 306 dairy farms located throughout the state, ranging in size from 10 to 1,700 cows. Dairy farms manage 700,000 acres of farmland and woodland and support more than 5,000 jobs directly and indirectly. The dairy industry has an annual impact of $570 million on the state’s economy.
Federal milk pricing, based on cheese and butter futures sold at the Chicago Mercantile Exchange, is extremely complicated. Most Maine milk, however, is sold in liquid form with a higher value than cheese or butter. Maine milk prices should have a local, not federal, origin, according to agriculture officials.
The recently expired federal Farm Bill has provided a price protection program known as the Milk Income Loss Contract (MILC) program. Despite the efforts of federal legislators including U.S. Sen. Olympia Snowe (R-Maine), no action was taken on the Farm Bill before Congress left for its recess, putting in limbo a number of programs critical in Maine, including the MILC program and other programs important to seniors, child nutrition education, and specialty crops, including potatoes and blueberries.
Vaughn Chase, who owns and operates the 600-acre Chase’s Organic Dairy Farm in Mapleton, expects the lapsed Farm Bill to affect dairy farmers “quite a bit.”
“The MILC program was like a buffer zone, or a safety net, that farmers had that would adjust to the feed and milk prices,” he said. “Since the Farm Bill has expired, there’s only one more payment that we’ll receive and then it will be no longer.”
Fortunately the Maine Dairy Relief Program, which is known as the tier system, is still in tact. The program puts a fee on every gallon of milk which indirectly goes back to dairy farmers to help them from going bankrupt when the federal milk price drops. Chase said, however, the expired Farm Bill will put additional strain on the dairy relief program.
“This situation will make the tier program run out of funds quicker than it’s supposed to,” he said. “I’d like to see ACF officials get an extension on the MILC program until they can get a Farm Bill passed. We need some help. With the drought in the Midwest, feed prices are almost 30 percent higher and are going to go higher still.
“What I foresee is milk prices are going to creep up because people aren’t going to feed their cows as much, there won’t be as much milk, and prices are going to go up anyway,” said Chase. “If they don’t pass a Farm Bill in January, milk prices could go up to $6 a gallon in the store.”
Whitcomb said state legislators have expressed support for the efforts on behalf of Maine producers and the dairy industry.
“Maine has been involved in efforts to change the national scope of milk pricing for a number of years,” he said, noting that Maine officials were armed with several federal milk pricing initiatives for the returning Congress. “We are hopeful that our efforts will be of benefit not only to Maine farmers, but also dairy farmers in our region.”
