Andrew M. Cuomo, Governor | Richard A. Ball, Commissioner
Jessica A. Chittenden

July 05, 2009

Governor Paterson Applauds Introduction Of Federal Legislation To Assist Dairy Farmers

Governor David. A. Paterson today applauded U.S. Senator Kirsten Gillibrand for responding to his request to introduce legislation that would provide additional assistance to New York dairy farmers, who continue to struggle with milk prices below the cost of production. The legislation would double the amount of money farmers receive from the Milk Income Loss Contract (MILC) program, a concept similar to what the Governor had proposed in a letter he sent the Congressional Delegation last February.

“Our dairy farmers are some of the greatest contributors to our Upstate rural communities and economy,” said Governor David A. Paterson. “Unfortunately, they are victims to a federal pricing system that is putting their livelihoods at risk. The proposal introduced by Senator Gillibrand is our best hope for some immediate, although short-term, relief. I appreciate the Senator’s commitment to this vital industry and I know that she, along with Senator Charles Schumer and our entire congressional delegation will work tirelessly to provide the assistance our farmers so desperately need at this time.”

In a letter sent to Senator Gillibrand on February 20, 2009, the Governor urged her to support the inclusion of additional funds for the MILC payment program. He wrote: “This price drop, coupled with the deep recession, is a one-two punch from which our farm economy may not recover. Prices have plunged well below the cost of production and are expected to remain there for much of 2009.”

MILC is a federal program administered by the United States Department of Agriculture (USDA) Farm Service Agency that compensates dairy producers when domestic milk prices fall below a specified level. Currently, the program pays farmers 45 percent of the difference between the target price of $16.94 and the current milk price. The Senator’s proposal would increase the payment rate to 90 percent of the difference and be retroactive to March 2009, as well as index the target price to inflation going forward.

New York State Agriculture Commissioner Patrick Hooker said: “We all anticipated a downturn in milk prices, however no one ever thought it would last this long. Dairy farmers throughout the nation are hurting financially and emotionally, as they are no longer making ends meet. Help is needed now more than ever before, and we appreciate both the Governor and Senator’s leadership on this front.”

For the first five months of 2009, the benchmark federal order average price was $11.59 per hundredweight, down 25 percent from the average of the previous five years. In June 2008, New York dairy farmers were paid $18.81 per hundredweight. Milk prices for June 2009 are expected to drop to around $11.40, while the latest USDA estimated cost of producing milk in New York is $25.27 per hundredweight.

New York is the nation’s third largest dairy state, generating $2.4 billion annually, over half of the State’s total agricultural receipts. New York’s 6,200 dairy farmers produce 12.1 billion pounds of milk or 1.4 billion gallons annually. The average dairy farm in New York State is family owned and consists of 100 cows, producing an average of 19,303 pounds of milk per cow per year.

Since the inception of the MILC program in 2002, New York State dairy farmers have received $264 million to help stabilize milk prices and help cover the costs of production during times of low prices. This year alone New York producers have received $48 million in assistance.

2009 Press Releases