05/24/2023 | Press release | Distributed by Public on 05/25/2023 06:19
"Dairy Margin Coverage Program" Schumer Helped Enact In 2018 Farm Bill Will Expire This September, Meaning Without Fed Action Payments To Dairy Farmers Could Cease, Hitting CNY And Cayuga County: -NY's #2 Milk Producing County - The Hardest
Schumer Says Upstate Dairy Farms and Consumers Will Be First Impacted If We "Go Over The Dairy Cliff" - Reverting Back To 1940's Era Policy, Leading To Severe Supply Chain Disruptions, Doubling The Price Of Milk, And CausingBillions In Avoidable Fed Spending
Schumer: We Cannot Afford To Let Fed Support For CNY Dairies Spoil, It's Time To Churn Up Support To Protect This Program For Upstate NY Farmers and Consumers
Standing at Cayuga Milk Ingredients, in the heart of Upstate New York's dairy country, U.S. Senate Majority Leader Charles E. Schumer today revealed that the vital Dairy Margin Coverage (DMC) Program Central New York dairy farmers rely on is in limbo as the program is set to expire, which could have farmers facing a "dairy cliff,' - an outcome that could double wallop farmers and consumers.
Schumer explained that the 2018 Farm Bill enacted the DMC, which gives offers monthly price support payments from the feds to dairy farmers, will end in September and if no action is taken would lead to less support for our farmers, severe supply chain disruptions and an increase in the price of milk.
Schumer is now launching a new push to protect this program, as Congress begins negotiations for this year's farm bill, to ensure Upstate New York dairy farmers have the support and safety net they need.
"Cayuga County is the beating heart of Upstate New York's dairy industry, and our farmers by the end of this year could be looking over a 'dairy cliff' that threatens lifeline payments, puts the industry in limbo, and increase the price of milk," said Senator Schumer. "The Dairy Margin Coverage Program is essential support for our farmers, which keeps milk flowing to major employers like Cayuga Milk Ingredients, and the best quality milk made from New York farms flowing to families across America. I helped enact the Dairy Margin Coverage Program in the 2018 Farm Bill and I will not stop fighting to churn up support to protect this critical program for our Upstate dairy farmers."
"Dairy is the number one agricultural sector in New York, and it is critical that the 2023 Farm Bill, especially the dairy support programs, continue to assist dairy farmers when milk prices are volatile. Cayuga County Farm Bureau and dairy farmers across New York appreciate Senator Schumer highlighting the importance of Dairy Margin Coverage and needed updates to the program to ensure it meets the needs of dairy farmers. As a New York dairy farmer, I see the value in strong Farm Bill programs that support dairy farmers as well as ensure the nutritious milk can continue to be provided to consumers," said Jon Patterson, a sixth-generation dairy farmer from Auburn, New York and Cayuga County Farm Bureau President.
"On behalf of Cayuga County, I can confidently say that we hope to avoid the Dairy Cliff scenario that Senator Schumer has warned us of here today. As the #2 dairy producing county in New York State, Cayuga County recognizes and appreciates the hard work that our dairy farmers put in season after season, year after year. Federal programs like the Dairy Margin Coverage program provide critical price support to our County's dairy industry," said Cayuga County Legislature Chair David Gould. "I applaud Senator Schumer for fighting to pass a Farm Bill this year, and for his tireless efforts to ensure the Dairy Margin Coverage program is reauthorized before it expires."
"I want to thank Senator Schumer for coming here today to advocate for reauthorization of the Dairy Margin Coverage Program," said Mayor of Auburn Michael Quill. The Dairy Cliff scenario could have devastating impacts on Auburn residents, including dairy prices skyrocketing by as much as 100% and consumers struggling to find dairy products in stores. Senator Schumer helped enact this important program in the 2018 Farm Bill, and I applaud him for coming to Auburn today to fight for its renewal so consumers aren't saddled with avoidable costs at the grocery store."
Schumer explained the 'dairy cliff' refers to the expiration of the Dairy Margin Coverage (DMC) program, a risk management tool that offers protection to dairy producers when the difference between the all-milk price and the average feed price (the margin) falls below a certain dollar amount selected by the producer. If Congress doesn't pass a 2023 Farm Bill and the DMC is allowed to lapse, the dairy industry would be the first impacted, as dairy farmers would lose out on monthly payments through the DMC, whereas farmers participating in other support programs are paid just once per year around harvest time. If we were to "go over the dairy cliff" that would mean:
These impacts would be felt especially hard in Central New York and places like Cayuga County, which is New York's #2 milk producing county and according to the most recent USDA Census of Agriculture, #37 in America. Cayuga County sells about $184 million worth of cow's milk every year, representing roughly 64 percent of all profits from agricultural products sold in the county. The Cayuga Marketing co-operative and its 108,000 sqft. processing facility, Cayuga Milk Ingredients, employ 95 people and alone provides the market with milk sourced from more than 40,000 dairy cows across 30 Cayuga County dairy farms. Cayuga Marketing and Cayuga Milk Ingredients market nearly 1 billion pounds of milk annually for use in milk products, such as milk powder, protein powder, and fluid milk. Schumer said that Central New York is the heart of New York's dairy country, and is the home to over 650 dairy farms, with Cayuga, Onondaga and Oneida all in the top ten counties for total milk marketed.
Failing to reauthorize the Farm Bill and going over the dairy cliff would not only negatively impact payments to dairy farmers, but it would also cause massive market disruption for larger factories like Cayuga Milk as well as smaller dairy operations and farmers, major price increases for consumers, and avoidable increases in government spending. Schumer explained that the only way to avoid going over the dairy cliff is for Congress to come together in a bipartisan fashion, as they have always done, to reauthorize these programs in the 2023 Farm Bill. The senator explained that the Farm Bill is usually enacted every five to seven years. The current Farm Bill, which was passed in 2018, is set to expire on September 30th, 2023.
The dairy industry would begin to see severe impacts at the start of the year on January 1st, 2024. If no Farm Bill is passed and the DMC is allowed to lapse, the country would be forced to revert back to 1940's agriculture policy. Farmers would lose the support and protection offered by DMC and the law would require the federal government to stabilize prices by taking milk off the market through milk purchases. The government would be required to purchase milk at a price that is more than double the current market price, which would cost the federal government billions of dollars in otherwise avoidable spending and could result in price increases being passed onto consumers, which would have devastating impacts on consumers and nutrition programs that offer milk and dairy products to people in need. The availability of fluid milk and dairy products could also be impacted; consumers could see fewer options in stores and food manufacturers could see less dairy product availability for products like baby formula, protein powder, and other products that use dairy ingredients. The widespread supply chain and market disruption caused by the DMC's expiration would have devastating impacts to the dairy industry, farmers, and consumers across the country.
Schumer has long been a strong supporter of the dairy industry in Cayuga County. Just last year Senator Schumer helped secured an over $1 million EDA grant to help construct a new wastewater pumping station that will directly support the ongoing growth and expansion of the Cayuga Milk Ingredients and Denkavit-Grober Nutrition dairy processing plants.
The dairy industry is one of New York's largest contributor to the agricultural economy. According to the New York State Department of Agriculture and Markets Dairy statistics, there are 3,600 dairy farms in New York that produce over 15 billion pounds of milk annually, making New York the nation's fourth largest dairy state.