Jessica A. Chittenden|
June 01, 2007
Commissioner Hooker Recognizes June as Dairy Month in NYS
Dairy Industry Significant to Upstate NY; Higher Prices Provide Needed Relief
New York State Agriculture Commissioner Patrick Hooker today announced that June is Dairy Month in New York State. Originally celebrated to help stabilize the demand for milk and dairy products during periods of peak production, today June Dairy Month simply honors America’s dairy farmers and the safe, wholesome products they produce daily.
"The dairy industry is New York’s leading agricultural sector, with nearly 6,000 dairy farms producing 12 billion pounds of milk annually," the Commissioner said. "These family operations range in size and are scattered throughout Upstate New York, but the one commonality between all of them is that they are committed to being good stewards of the land and to producing a healthy and wholesome product. So I ask every New Yorker to join me this month in pouring a tall glass of cold milk and honoring our hard working dairy farmers for all that they do."
The dairy industry contributes significantly to the State’s economy by generating $1.41 billion, over half of the State’s total agricultural receipts, and providing some of the highest economic multipliers in the State. Cornell University estimates that for every new job created on a dairy farm, an additional 1.24 jobs are created in the community, and for every dollar of output, an additional $.83 is generated. Dairy processing provides an additional 4.72 jobs for every job created in a plant, the highest multiplier in the State, and generates an additional $1.26 to the community for every dollar of product sold.
"New York’s dairy industry is a major contributor to the economic well-being and quality of life experienced in Upstate New York," the Commissioner added. "While it’s been a difficult road for many dairy farmers over the past year, the future is promising with stronger milk prices on the horizon. But even at higher prices, milk is still a nutritional bargain that provides children and families with protein, calcium and eight other essential nutrients."
Milk pricing is an extremely complex process that is administered at the federal level by USDA’s Milk Market Administrator’s Office. The price dairy farmers receive for their product is primarily determined by the national supply and demand situation and the utilization of various dairy products.
In 2006, the price New York dairy farmers received for their milk was well below that of 25 years ago and below their costs of production. The average price paid to farmers in 2006 was over $13 per hundred pounds of milk. USDA estimated that it costs nearly $15 to produce a hundred pounds of milk in New York State. This price squeeze resulted in unprecedented losses for New York’s dairy industry, leaving many farms with high debt loads and forcing an estimated 460 commercial dairy farms out of business in 2006.
Since 2006, costs of production have continued to increase with high fuel costs and increased feed costs due to corn being diverted into ethanol production. These increased costs, coupled with an increased global demand for milk proteins has slowly, but steadily strengthened the price farmers receive for their milk. Today, New York dairy farmers are receiving over $16 per hundred pounds of milk, and could increase to as high as $21.
To help ensure fair prices for farmers and consumers, the Department establishes a monthly threshold price to help prevent price gouging at the retail level. The threshold price establishes a presumptive upper limit price that retailers can charge consumers, which works to ensure that the price consumers are paying is reflective of the price farmers are receiving at the time. Therefore, since the price farmers are receiving is increasing at the moment, consumers will also experience increases at the retail level. However, in 2006 when farm prices fell, consumers also experienced a decrease in prices at the retail level.
New York ranks third in the nation for overall milk production, producing 12 billion pounds of milk annually. One quarter of the State’s milk production is used for fluid consumption, while the remainder is processed into dairy products. New York has 115 dairy processors that make nearly 700 million pounds of cheese, 184 million pounds of cottage cheese, 16 million pounds of butter, 237 million pounds of yogurt and 30 million gallons of ice cream.
New York ranks third in the nation for cheese production with mozzarella and cheddar being the most popular varieties. The State leads the nation in the production of cottage cheese, which accounts for a quarter of the national production.
The average dairy farm in New York State is family owned and consists of 100 cows, producing an average of 18,879 pounds of milk per cow per year.
2007 Press Releases