Struggling Herkimer County dairy farmers can expect a little relief in the coming weeks.
The United States Department of Agriculture on Thursday announced how it will distribute $290 million in direct relief to dairy farmers.
As part of federal legislation that distributes $40 million statewide in emergency payments made directly to dairy farmers, the qualified farms in the county will be receiving a total of $833,600, according to USDA figures.
Payments will be sent automatically to farmers, and no application is needed, according to U.S. Senator Charles Schumer.
The USDA will calculate payments based on each qualifying dairy operation’s total pounds of production commercially marketed during the months of February through July, multiplied by two, up to six million pounds per dairy operation.
A payment rate is yet to be determined, but it is estimated that it will be approximately 32 cents per hundredweight, officials said.
The vast majority of New York farms fall under this cap, whereas thousands of industrial farms from other states will be over the cap, Schumer said.
The program will also be restricted to farmers who have annual average adjusted non-farm income of $500,000 or less.
“We have more work to do to ensure that more farms don’t succumb to bankruptcy, but this is a good start that will provide a quick boost, and help farmers through to a time when they see increased revenue,” Schumer said.
Relief funds will be combined with $60 million in cheese and dairy product purchases for food banks and other nutrition and feeding programs, aimed at supporting pricing, officials said.
While the funds will help dairy farmers to stay afloat, many feel the root of the problem remains.
Local dairy farmers over the last year held several rallies and lobbied their representatives, hoping to gain government support for changes to a pricing formula they feel is unsustainable.
Farmers are basically paying more to produce the product than what they get paid when they sell it.
“While this is great for New York’s dairy farmers, this is only a temporary solution to the fundamental problems with the dairy pricing system,” U.S. Senator Kirsten Gillibrand said of the direct relief payments.
Gillibrand, who serves on the Senate Agriculture Committee, introduced the Family Dairy Preservation Act that would index the MILC program rate of $16.94 to inflation. “The price floor of $16.94 per hundredweight has not changed since the 1990s, yet the cost of production has increased exponentially,” she said.
Under the Milk Income Loss Contract, or MILC program, the USDA Farm Service Agency supports the dairy industry through the provision of a monthly payment to milk producers whenever the price for fluid milk drops below the benchmark price of $16.94 per hundredweight.
But local farmers have said the broad fluctuations in pricing and cost of production increases limit the effectiveness of the MILC payments.
Gillibrand said she is working with stakeholders and economists to develop a proposal before the next Farm Bill is written in 2012 that will mitigate the boom and bust cycle that dominates the American dairy industry.
The USDA on Thursday announced an estimated $40 million in direct relief payments to dairy farmers. Here what the region farmers will be getting in the coming weeks:
Herkimer: $833,600
Oneida: $1,352,000
Otsego: $2,635,000
Fulton: $160,000
Montgomery: $947,200
