Some Minnesota dairy farmers struggling with low milk prices say a federal insurance program created in the 2014 farm bill isn’t providing the protection against falling milk prices that it promised.
Dairy farmers pay a premium to buy protection against falling milk prices through the margin protection program, Minnesota Public Radio reported .
“I think the dairy industry was pretty enthusiastic following the 2014 farm bill,” said John Newton who works for the American Farm Bureau Federation, a group that lobbies for agricultural issues. “About 80 percent of the U.S. milk supply was enrolled in the program — 24,000 out of 40,000 dairy farmers signed up to participate in the program.”
But since milk prices have fallen from their record high in 2014, farmers said they’ve received little in return for the premiums paid. A gallon of milk cost consumers about $3.85 four years ago. Now that price is about $3.15.
The program was created to give farmers some financial help during unprofitable times.
“It has not done anything for me as far as that goes,” said Dave Schwartz, who’s been milking cows for nearly 60 years. Schwartz said that while his milk-sales have been breaking even, many other dairy farmers are losing money.
Farmers across the U.S. have invested $100 million in premiums, but they’ve only received $12 million from the program, which is a much lower rate of return compared to other federal farm programs, Newton said.
“Dairy farmers need a safety net that works,” said Newton.
Newton believes the program’s main problem is that it underestimates the cost of producing milk, which leads to lower payouts.
The farm bill has provided dairy farmers with “virtually no assistance,” said U.S. House agriculture committee chair Michael Conaway of Texas during a hearing last year.
Congress will complete a new farm bill by the end of the year. Lawmakers have already made changes to the margin protection program, but with tight budget constraints, it’s uncertain if dairy farmers will get more funding.
Source: The Associated Press/Seattle Times