Senate Budget Provides $60 Million In Relief To Dairy Farmers

James L. Seward

March 12, 2007

Senate Republicans today voted to approve a new budget proposal that would provide $60 million in immediate financial assistance to dairy farmers across the state. In contrast, the budget proposals advanced by Governor Eliot Spitzer and the state assembly majority include no financial assistance package for the beleaguered dairy industry.

"This is the outgrowth of hearings we held across on the state on the plight of dairy farmers," Seward said. "It's important to help our dairy farmers - now."

"Dairy farmers throughout Upstate New York are facing tremendous financial challenges right now, and I'm proud that the Senate Majority is stepping up to provide this critical relief," said Senate Agriculture Committee Chair Cathy Young, who was the prime sponsor of legislation that was the basis for this funding increase. "We need to invest in our dairy farms. A strong and vibrant dairy farm industry is vital to the health of our state's economy, and it's time for the assembly majority and our governor to join with us in supporting our dairy farmers."

"Historic low milk prices, coupled with high fuel and feed prices have dealt a tremendous blow to the dairy industry. New York and New England states compete for a piece of the same dairy market. Therefore, it makes sense that New York should follow in the example of Vermont, and offer additional supports to farmers," said Senator Jim Wright, who represents two of New York's top three counties in dairy productions. Senator Wright was the co-prime sponsor of legislation that was the basis for this funding increase. "It is essential to ensure that dairy farms can not only stay in business, but survive in their business. Providing an additional financial support system is not only good for dairy farm families, but also for rural upstate economies and consumers."

"The dairy industry serves as the backbone of the upstate economy and the economic impacts of our $3 billion industry ripples through a large number of local economies across New York," said John W. Lincoln, President, New York Farm Bureau. "This considerable investment in the dairy industry will go a long way in helping to financially strengthen dairy farms in a time of extremely low commodity prices and very high energy and livestock feed prices. Moreover, this major investment in the dairy industry will also be felt by the many businesses in our rural communities that support the farm industry. Quite simply, this investment is a win-win for upstate New York. We thank Senate Majority Leader Bruno, Senator Young and the entire senate majority for their support of agriculture."

The state budget proposal approved by the senate would establish a new dairy assistance program within the New York State Department of Agriculture. The program, which is similar to an initiative used in the State of Vermont, will pay eligible farmers the difference between target prices established by the agriculture commissioner and the combined Northeast Federal Order Statistical Uniform Price, plus the amount of the milk income loss contract X payment rate on a per-hundredweight basis.

Senator John J. Bonacic (R-I-C, Mount Hope) stated, "A viable dairy industry is crucial to the health and well-being of all New Yorkers. High energy costs, low milk prices, and recent devastating floods have resulted in tremendous losses for our farmers. It is in everyone’s best interest for the state provide financial assistance to dairy farmers as it is a $3 billion industry and provides thousands of jobs."

"Almost every day I talk to a farmer who asks for help. These farmers aren't ever asking for a hand-out, they are asking for a level playing field," Senator Joseph A. Griffo (R, C-Rome). "This assistance will help them to remain competitive and continue to keep this economic engine alive while at the same time providing safe, fresh food to the people of New York State."

"The assistance we've proposed would come at a critically important time for many dairy farmers struggling to make ends meet," said Senator Betty Little (R,C,I-Queensbury), a member of the Senate Agriculture Committee. "Dairy is a major component of our Upstate economy, and the last thing we can afford is to lose more farms. This is a good investment. I would hope my colleagues in the Assembly and the governor recognize the need and support the inclusion of this financial assistance in the final budget."

Dairy producers will receive payments from the state in the form of a separate check based on pounds of milk produced during the 2006 calendar year. These payments will be made within thirty days of the proposal's enactment.

Dairy farming is a vital part of the fabric of the state’s rural communities, generating tens of thousands of jobs both on and off farms, and productively employing millions of acres of farmland. Unfortunately, high fuel and feed costs, labor shortages and flooding have created a "perfect storm" scenario that has had a devastating economic impact on many milk producers. In addition, low milk prices, an outdated price control system administered by the United States Department of Agriculture (USDA), and the escalating cost of running a family farm have resulted in unprecedented losses for dairy farms across the state.