With milk prices heading below $10 in some parts of America's dairy land, the National Family Farm Coalition and the Progressive Agriculture Organization predict that Congress' failure to quickly address the widening financial crisis could cost the dairymen $15 billion during 2009. It may happen, even if an economic stimulus package is sent to President Obama this week, contends Arden Tewksberry, Pro Ag's manager.
Using a multiplier factor of five, the rural economy could be losing nearly $75 billion of needed revenue, he asserts. Already in rural America, various companies that service the needs of dairy farmers have found it necessary to release their workforce.
Rising milk production combined with slowing dairy product sales and exports, are just beginning to impact dairy farms. "Pay price for January's milk around Feb. 16 will be near $14.20 to $14.25 per hundredweight," estimates Tewksberry. "The shocker will come around Feb. 24 when dairy farmers receive $9.59 per hundredweight for their advance checks for two weeks' delivery of milk in February. About March 16, the actual blend price will be barely a hair over $12."
The economic stimulus is a just need, adds Tewksberry. But he contends there's also a need for allowing dairy farmers to continue producing essential local supplies of milk for our nation's consumers. NFFC and Pro Ag have provided members of Congress with emergency plans and a long-term solution to the dairy farmers' financial crisis. Part of these plans, he contends includes "a new pricing formula based on the cost of producing milk, coupled with a true inventory management program."
In this national emergency, dairy farmers belonging to dairy cooperatives need to address these critical issues, he argues. "Dairy cooperatives have a moral responsibility to achieve a fair price for the dairy farmers. And, I certainly don't mean milk prices in the range of $9.50 to $12.00 per cwt."