September 30, 2012

Lack of action on Farm Bill imperils state's dairy industry

By Ben McCanna
Staff Writer

A partisan stalemate in Washington, D.C., has left one of Maine's largest industries in limbo.

click image to enlarge

George Goodwin milks dairy cows on a revolving industrial milking machine at Flood Brothers Farm on River Road in Clinton on Wednesday.

Staff photo by Michael G. Seamans

click image to enlarge

Connor Tulley, 17, of Fairfield, handles milking cows on the industrial revolving milking machine at Flood Brothers Farm on River Road in Clinton on Wednesday.

Staff photo by Michael G. Seamans

Farmers across the state are anxiously awaiting resolution on the so-called Farm Bill, which was stalled in Congress during the last session and won't be addressed until a lame-duck session after the election, or in January, after new lawmakers are sworn in.

Jon Olson, executive secretary of the Maine Farm Bureau -- a nongovernmental group that lobbies on behalf of agriculture -- said the holdup in Congress affects all Maine farmers, but dairy farmers are in the worst spot.

The Farm Bill -- a massive hodgepodge of laws that regulate the agriculture industry -- expires today with nothing to take its place. The bill, which is renewed every five years, includes loan guarantees for farmers, land conservation programs, agricultural research, forestry and much more. A summary of the bill spans 17 pages.

The bill also pays for the nation's food stamps program -- which comprises 80 percent of the total cost to taxpayers. Not surprisingly, food stamps are at the center of the partisan squabbles.

Dairy farmers are bearing the brunt of the industrywide uncertainty because the federal subsidies that support them during tough times are now gone and nothing new is on the horizon.

It couldn't come at a worse time, because dairy farmers are beseiged by soaring prices of grain and fuel. Farmers now sell their milk for substantially less than what it costs to produce.

"The frustrating thing about the Farm Bill is that people know there's an urgency to pass it, but it never comes up for a vote," Olson said.

Local effect

In Maine, there are more than 300 dairy farms -- all of which are family owned, said Julie-Marie Bickford, executive director of the Augusta-based Maine Dairy Industry Association. About 1,400 Mainers work on dairy farms, and another 2,600 work in dairy processing plants, cheese companies or other dairy-related businesses.

Bickford said the dairy industry in Maine and elsewhere suddenly is working without a safety net.

In late August, a federal program called the Milk Income Loss Contract expired, never to return. The program included a provision to help offset high grain prices for dairy cows, called the "feed adjuster."

The industry was concerned about the loss of the feed adjuster, but fears were tempered by new provisions in the next Farm Bill that would include assistance akin to the feed adjuster.

Earlier this month, however, when it was apparent that Congress would enter recess without passing the bill, industry leaders pleaded for Washington's help. Maine's four-member delegation, along with more than a dozen other lawmakers, signed a letter to urge colleagues to extend the measure.

It didn't happen.

"We're caught in the cross hairs," Bickford said.

The dry weather last summer in Maine and throughout the country resulted in low yields of grains and higher than normal prices. It now costs Maine dairy farmers up to $28 to produce 100 pounds of milk, for which they're paid about $18, Bickford said.

"Nobody ever imagined we'd see $8 for a bushel of corn or $4.30 diesel," she said. "MILC (Milk Income Loss Contract) was the only program out there that recognized our input costs."

Dale Cole milks about 85 cows on his farm in Sidney and serves as board president of the Maine Dairy Industry Association. Cole loses between $3 and $4 for every 100 pounds of milk his farm produces.

"The feed adjuster wasn't perfect, but it was better than nothing," he said.

In other industries, production of goods generally shuts down during periods when costs exceed revenue. In the dairy industry, however, there's no such thing.

(Continued on page 2)

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