NORWICH – Both immediate measures and long-term reforms are needed to ensure the future viability of New York’s dairy industry, according to the head of the state’s Department of Agriculture and Markets.
“It’s time for agriculture to rally around dairy, and time for rural business to do the same,” said New York State Agriculture Commissioner Patrick Hooker as he addressed more than 100 local business leaders at Commerce Chenango’s annual Economic Forecast Breakfast Tuesday.
Hooker was the keynote speaker at the event, which was held at the Howard Johnson’s Hotel in Norwich. The looming crisis for dairy farmers was one of the topics he addressed in his discussion of issues facing the state’s largest industry, agriculture.
“There are 35,000 families across the state in this business,” Hooker said. According to him, the industry contributes $25 billion to the New York State economy, $4 billion of which are “direct sales at the farm gate.”
“New York is a tremendous state to grow things in,” he explained, citing the high quality of our natural resources, mineral-rich soils and abundance of water. These factors make the state an ideal location for growing fruits and vegetables, which make up 40 percent of New York’s ag industry.
Dairy is still by far the largest portion of the overall agricultural market, reported Hooker, representing 60 percent of total receipts. And New York ranks as the nation’s third largest dairy state. That’s why a struggling dairy industry will have an impact on many sectors of the economy.
“I don’t think there is any way to sugar coat it,” Hooker said. According to him, dairy is in for the most “gut wrenching time that it as ever seen.”
Supply is strong, but demand is weak for the commodity, he explained. At the same time processing, transportation and feed costs are at an all-time high. Exports, which Hooker said comprise 10 percent of dairy production, have “fallen like a stone.”
In the last year, the advance prices paid to farmers for milk has been nearly cut in half. In January of 2008, farmers were receiving on average $1.60 a gallon. In the first month of 2009, the price per gallon had dropped to $.86.
“It’s a dramatic difference,” he said, and one that will have a ripple effect across both industry and consumers.
Federal regulators are discussing long term solutions to the problem, but none of which will address the immediate situation for farmers who are fearing they will “loose equity that they have spent a lifetime building up.”
While important for sustained viability in the future, the current proposals are not helpful in the short term, Hooker said.
There is even some discussion that the national dairy herd should be reduced by 200,000 to 400,000 cows, he added. A move which according to Ken Dibbell, a local dairy advocate, would also have a devastating effect on the country’s beef industry.
As discussion occurs on the national level, Hooker, who grew up in rural Madison County, said he has only one concern.
“I’m only worried about New York. ... I want our dairy industry to survive,” he explained.
The dairy battle is being waged at a time when Hooker is faced with hard decisions about his department’s budget.
“No one was spared; there were cuts everywhere,” he said. He stressed the need to make “intelligent” cuts, based on which programs are truly important and fit with the department’s missions of agricultural economic development, environmental stewardship and food safety. As a result expenditures on promotions have been cut, but funding for disease control and food inspection were maintained.
“We’re spending where we have to spend,” Hooker explained. While the cuts weren’t easy to make, he said he is not overly worried about the upcoming year.
“No question about it, we’re able to function,” he said.
One of the major problems Hooker said he has faced in his career as an agriculture advocate, both for the New York Farm Bureau and in Albany, is a lack of understanding. The commissioner joked that for years he has been putting the Agricultural Education degree he received from Cornell University to use “teaching below grade level” to help educate people about the importance of agriculture to the state’s economy.
But as elected officials and consumers alike have concerns about food security and become more aware of the environmental impact of buying locally as opposed to imported foods, there will be an opportunity for New York farmers.
“We have a natural, sustainable production system here in the Northeast,” said Hooker. “This is the kind of agriculture that American needs for the next century.”