WASHINGTON, DC – The USDA announced Friday that it would temporarily raise prices paid for cheese and nonfat dry milk through the Dairy Product Price Support Program, an action they anticipate will increase revenues to dairy farmers by as much as $243 million.
“The price increase ... will provide immediate relief to dairy farmers across the country and keep many on the farm while they weather one of the worst dairy crises in decades,” said Agriculture Secretary Tom Vilsack in a press statement issued on Friday.
Through the program, the USDA is the “buyer of last resort,” purchasing surplus dairy product if and when farm gate prices fall below a predetermined level. The agency has the authority to increase the price paid for these commodities over what was established in the 2008 Farm Bill.
The temporary price increase announced last week will raise the price the USDA pays for nonfat dry milk by $0.12 to $0.92 per pound and that paid for block cheddar cheese and cheddar barrels by $0.18, to $1.31 and $1.28 per pound respectively throughout August and October.
The measure is expected to result in the purchase of an additional 150 million pounds of non-fat dry milk and 75 million pounds of cheese by the government, as well as a corresponding rise in milk prices paid to dairy producers.
The USDA plan was greeted with support from New York State lawmakers.
“We are incredibly pleased that Secretary Tom Vilsack ... will support raising the price support of dairy products as the first step to relieve some of the financial strain experienced by dairy farmers across the nation,” said Governor David Patterson on Friday.
Senator Charles Schumer, who met earlier last week with the agriculture secretary, also spoke in support of the move.
“Our dairy farmers are in real trouble. I am glad that the Secretary of Agriculture heard our pleas and commend him for taking this important action,” said Schumer, who noted that the plan will not solve the problems being faced by New York’s struggling dairy farmers in its entirety and pledged to continue fighting “for higher prices for our dairy farmers.”
Some advocacy groups are also not entirely satisfied with the USDA move.
“While we are heartened that Secretary Vilsack acknowledges the grave crisis dairy farmers are confronting, raising dairy support prices by these small amounts is unlikely to stop the economic devastation occurring in rural America,” explained Wisconsin Dairy Farmer Paul Rozwadowski, who serves as dairy subcommittee chairman of National Family Farm Coalition Dairy Subcommittee, a grassroots organization which advocates for farm and agricultural issues.
According to a statement released by the NFFC on Friday, they believe the USDA plan “still falls far short of a real remedy to stop the imminent bankruptcies of dairy farmers across the country.” The group claims that even with the temporary increase in price support, milk prices will still be lower than the cost of production.
“We need at least an $18 emergency floor price on all manufactured milk to be able to stay in business and survive,” reported Rozwadowski. “This would be a much less costly solution than USDA simply buying up more products.”