Milk federation urges Congress to target cheese purchases

By CAROL RYAN DUMAS

Capital Press

National Farmers Union members were in Washington, D.C., this week to ask members of Congress to support a proposed $350 million assistance to struggling dairy producers.

Shortly before it recessed in July, the Senate passed the amendment offered by Sen. Bernie Sanders, I-Vt., to the FY 2010 Agriculture Appropriations bill.

In a letter sent last week, Roger Johnson, president of the National Farmers Union, urged Senate and House appropriators to maintain the amendment throughout conference negotiations.

"While there is no single option to solve the dairy crisis, the Sanders amendment is a lifeline," Johnson said.

Dairy producers are facing the dairy industry's most severe economic crisis in 30 years, he said.

"Since dairy prices peaked last year, the market has precipitously collapsed to historic low levels and is now well below the cost of production. Many producers continue to lose $100-$200 per dairy cow per month," Johnson said.

The amendment, which doesn't specify how the money would be spent, was not included in the House-passed ag appropriations bill.

National Milk Producers Federation is urging congressional leaders to direct the assistance toward the purchase of cheese, which would then be donated through food banks and other charities to help feed the hungry.

In a letter sent last week to Senate and House appropriators, the National Milk Producers Federation said the $350 million would be most effective if used to purchase consumer cheese products. An analysis by the federation shows USDA purchases would boost dairy farmer income by $1.3 billion over a period of several months.

In contrast, using the $350 million to increase direct payments to farmers or to supplement the Dairy Product Price Support Program would increase farmer income by $335 million and $185 million, respectively.

"It is dramatically clear from our results that the purchase of cheese for use in domestic feeding programs would provide the biggest benefit to the producer milk price at this time," said Jerry Kozak, president and CEO of the National Milk Producers Federation.

The federation estimates that the typical dairy producer would see an increase of 65 cents per hundredweight as a result of cheese purchases.

In addition to boosting dairy farmers' income in a year when they are faced with a $12 billion loss in sales, the proposed cheese purchases "would provide a huge and targeted nutritional benefit to millions of food-insecure American families during this time of national economic hardship," Kozak said in the letter.

Staff writer Carol Ryan Dumas is based in Twin Falls. E-mail: crdumas@capitalpress.com.

Predictions

Current futures markets predict prices (per pound) for the end of this year and into next year:

Cheese Nonfat Dry Milk

October $1.39 $0.98

November $1.42 $0.98

December $1.44 $0.99

January 2010 $1.48 $1.04

Rest of 2010 higher higher

Source: NMPF

Summary of various outcomes of using the $350 million in federal funding:

Increased Average Producer Prices (annual basis) Increased Producer Income

$ per cwt. millions of $

Million $: $350 $350

Increase Price Supports $0.09 $185

Direct Payments $0.17 $335

Cheese Purchases $0.65 $1,300

Source: NMPF

Online

National Farmers Union: www.nfu.org

National Milk Producers Federation: www.nmpf.org

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