Senators Announce $30 Million In Relief To Dairy Farmers

Thomas P. Morahan

April 01, 2007

Senator Thomas P. Morahan (R-C-I, New City) and members of the Senate Majority Conference today joined with New York dairy farmers to publicly announce the approval of the Dairy Investment Act, a $30 million program included in the 2007-08 state budget that will provide direct and immediate financial relief to New York’s dairy farmers.

The State Senate included $60 million in funding for dairy farmers in their original budget proposal, while the budget proposals advanced by Governor Spitzer and the New York State Assembly provided no financial assistance package for the beleaguered dairy industry. Throughout the budget process, members of the Senate Majority Conference fought to ensure that aid for dairy farmers would be included in the final state budget.

"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 this $30 million allocation will help our dairy farmers immediately," said Senator Morahan.

"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."

The State Budget passed by the Legislature establishes 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.

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.