The state's Farm Bureau president said he Friday he welcomed a federal dairy relief plan, but worries how it will work and how it might negatively impact the dairy market when it eventually rebounds.
The Agriculture Department on Friday aimed to help struggling dairy farmers by raising the price paid for milk and cheddar cheese through a dairy price support program.
The department estimates the temporary increases, which will be in place until October, will boost dairy farmers' overall revenue by $243 million.
"The average dairy farmer is losing approximately $100 per cow per month this summer due to low milk prices," said Bill Bruins, a dairy farmer from Waupun who is the president of the Wisconsin Farm Bureau Federation. "Given this scenario, any news of assistance from the USDA is welcomed."
Agriculture Secretary Tom Vilsack said Friday that the price increase will provide immediate relief, helping to keep dairy farmers on the farm while they weather what he called "one of the worst dairy crises in decades."
Many dairy farms around the country have been in danger of closing as milk prices have hit lows and operational costs have skyrocketed, and lawmakers from high-producing dairy states have been pushing the department to temporarily boost the prices.
The price paid by dairy processors to farmers is set by the U.S. Department of Agriculture based on commodity markets that rise and fall with global demand. Dairies increased production when demand for U.S. milk exports soared last year, but once the global recession accelerated last fall, demand dropped and farmers were left with too much milk and too many cows. Wholesale prices crashed.
Bruins said raising the price paid for cheddar blocks from $1.13 per pound to $1.31 per pound will equate to an approximately $1.80 per hundredweight boost for dairy farmers.
"This would still result in prices received well below the cost of production," Bruins said in a news release.
The Agriculture Department has otherwise tried to buoy wholesale prices recently by releasing 200 million pounds of excess powdered milk to schools, food banks and needy countries to reduce U.S. supply and by accelerating payments to farmers.
The USDA plan calls for the government to purchase an additional 150 pounds of non-fat dairy milk and 75 million pounds of cheese. Bruins said the purchase of non-fat dry milk will spur immediate relief, but the same might not be true of cheese.
"Many cheese plants are not set up to sell to the government, so there will be a lag time involved," Bruins said. "This relief plan is so temporary, just three months, that I have concerns that not all cheese processors will go through the trouble of meeting the government's standards, which will minimize the impact."
The biggest problem, Bruins said, is having the government buy up more dairy products. A release of those products into the market, Bruiins said, will blunt the uptick when prices eventually go back up.
Bruins said he'd have rather the USDA make changes to the Milk Income Loss Contract program.
"Instead of buying up dairy products, increasing the payment rate from 45 to 60 percent, and the amount of milk eligible per producer from nearly 3 million pounds of milk to 6 million pounds in the MILC program would have put money immediately in the pockets of dairy farmers," Bruins said.
Sen. Russ Feingold, D-Wis., agreed that a higher floor price would have helped, but said Friday's move "is welcome news in this difficult economic climate."
Sen. Herb Kohl, D-Wis., also lauded the USDA's efforts, and said that "although we don't have all the answers, we are committed to pressing forward on (dairy farmers') behalf."
Vilsack has said the department is reviewing dairy policy to determine what changes are needed to reduce price volatility and enhance farmer profits.
The Agriculture Department on Friday aimed to help struggling dairy farmers by raising the price paid for milk and cheddar cheese through a dairy price support program.
The department estimates the temporary increases, which will be in place until October, will boost dairy farmers' overall revenue by $243 million.
"The average dairy farmer is losing approximately $100 per cow per month this summer due to low milk prices," said Bill Bruins, a dairy farmer from Waupun who is the president of the Wisconsin Farm Bureau Federation. "Given this scenario, any news of assistance from the USDA is welcomed."
Agriculture Secretary Tom Vilsack said Friday that the price increase will provide immediate relief, helping to keep dairy farmers on the farm while they weather what he called "one of the worst dairy crises in decades."
Many dairy farms around the country have been in danger of closing as milk prices have hit lows and operational costs have skyrocketed, and lawmakers from high-producing dairy states have been pushing the department to temporarily boost the prices.
The price paid by dairy processors to farmers is set by the U.S. Department of Agriculture based on commodity markets that rise and fall with global demand. Dairies increased production when demand for U.S. milk exports soared last year, but once the global recession accelerated last fall, demand dropped and farmers were left with too much milk and too many cows. Wholesale prices crashed.
Bruins said raising the price paid for cheddar blocks from $1.13 per pound to $1.31 per pound will equate to an approximately $1.80 per hundredweight boost for dairy farmers.
"This would still result in prices received well below the cost of production," Bruins said in a news release.
The Agriculture Department has otherwise tried to buoy wholesale prices recently by releasing 200 million pounds of excess powdered milk to schools, food banks and needy countries to reduce U.S. supply and by accelerating payments to farmers.
The USDA plan calls for the government to purchase an additional 150 pounds of non-fat dairy milk and 75 million pounds of cheese. Bruins said the purchase of non-fat dry milk will spur immediate relief, but the same might not be true of cheese.
"Many cheese plants are not set up to sell to the government, so there will be a lag time involved," Bruins said. "This relief plan is so temporary, just three months, that I have concerns that not all cheese processors will go through the trouble of meeting the government's standards, which will minimize the impact."
The biggest problem, Bruins said, is having the government buy up more dairy products. A release of those products into the market, Bruiins said, will blunt the uptick when prices eventually go back up.
Bruins said he'd have rather the USDA make changes to the Milk Income Loss Contract program.
"Instead of buying up dairy products, increasing the payment rate from 45 to 60 percent, and the amount of milk eligible per producer from nearly 3 million pounds of milk to 6 million pounds in the MILC program would have put money immediately in the pockets of dairy farmers," Bruins said.
Sen. Russ Feingold, D-Wis., agreed that a higher floor price would have helped, but said Friday's move "is welcome news in this difficult economic climate."
Sen. Herb Kohl, D-Wis., also lauded the USDA's efforts, and said that "although we don't have all the answers, we are committed to pressing forward on (dairy farmers') behalf."
Vilsack has said the department is reviewing dairy policy to determine what changes are needed to reduce price volatility and enhance farmer profits.