Washington D.C. (March 3, 2008) -The National Family Farm Coalition convened an important teleconference call today with dairy farm leaders from across the country to address the ongoing crisis in the dairy sector and to highlight the Farm Bill's failure to take into account cost of production for dairy farmers. At stake is the survival of America's remaining 59,135 dairy farmers.

Paul Rozwadowski, NFFC Dairy Subcommittee chair, said, "I was glad dairy farmers from across the country got to address the issue of cost of production and how the Farm Bill has failed farmers. The politicians have previously tried to divide us along regional lines, but today's call showed how all farmers are in the same boat and I was heartened by the response to our stories." (Paul's opening statement is attached at the end of this release).

Arden Tewksbury of Progressive Agriculture of Pennsylvania outlined the history and devastating conditions dairy farmers have faced since parity pricing was eliminated in 1981 and said it showed why a new approach, such as the S. 1722 bill introduced by Senators Casey (D-PA) and Specter (R-PA), was needed (more info on S. 1722 attached). "It's obvious our dairy farmers have not been receiving a fair price since April 1, 1981, the day President Reagan and Congress took away parity," recalled Tewksbury. "Ever since then, we have been on a roller coaster of volatility that has severely hurt our family farmers. Already for March, prices for Class I milk have dropped by $5 since the fall! I thank the media for listening to our voices and believe cost of production is now a known factor that must be considered in our farm policies. Without a bill like S. 1722 based on cost of production, our industry will not survive."

Joaquin Contente, president of California Farmers Union and the California Dairy Campaign, exposed how the forward contracting provision included in both the Senate and House Farm Bills would only lower producer prices. A USDA pilot program showed farmers losing millions as a result of locking up the price of their milk to processors who are able to pay below the Federal Order's minimum price. Forward contracting had a role in 2006's devastatingly low milk prices due to DairyAmerica and Dairy Farmers of America contracting powdered milk at depressed prices to Fonterra, the New Zealand company who controls much of the world supply of powder. As a result of price misreporting on these contracts, dairy farmers lost at least $50 million in 2006 that has never been compensated. Contente warned that corrupt cooperatives were preparing again to sell powder at depressed values despite high world demand, further lowering milk prices that have already dropped by $3 in California.

Contente also noted how consolidation in the industry had created unfair markets that were now heavily tilted against the farmer: "There really is no free market for milk in the U.S. since three corporations control most of the market. Dean Foods controls much of the fluid milk supply, Leprino controls the service sector while Kraft dominates the retail sector."

Joel Greeno, a Wisconsin dairy farmer and vice president of Family Farm Defenders, explained why MILC (Milk Income Loss Contracts) payments were an inadequate safety net, since it requires farmers to lose $3,375 to gain a $148.50 MILC check. "The MILC payment floor is completely outdated given that our costs of production are going up 30-40%. For soybean meal, I am now paying 50% more. Farmers don't want to be paid with taxpayer subsidies. S. 1722 would cost taxpayers less by replacing the failed MILC program with a cost of production that would cost the government nothing."

LoriJayne Grahn, a Minnesota dairy farmer and NFFC member, showed how the failed pricing system forced her out of business when milk prices dropped to $10 a hundredweight in 2006, despite her winning awards for her milk. She spoke out against dairy groups who she says do not represent her and stressed why consumers need to care about cost of production: "National Milk Producers Federation is a misleading voice for dairy farmers and cannibalizes the very industry they claim to represent. Their associates are the same corporate crooks, such as Monsanto, Chicago Mercantile Exchange, Dean Foods, Fonterra, who have been destroying the dairy industry. Consumers need to understand what it means to them as they lose their good, dedicated U.S. farmers as corporations substitute our quality milk with adulterated dairy byproducts, such as milk protein concentrates and ultrafiltered milk, which are often imported from abroad. How many more tainted food products from China will it take before we realize our nation's food supply is threatened if we don't preserve our dedicated farmers who provide us with a local, fresh quality product?"

In lieu of continuing with a status quo Farm Bill, NFFC supports letting the current Farm Bill expire and, as suggested by Representative Collin Peterson (D-MN) reverting back to the 1949 Permanent law, which would call for a $28 parity price for dairy.

Current Cost of Production for Dairy (Jan 2008)
New York $27.27
Pennsylvania $27.59
Wisconsin $21.07
Minnesota $24.63
California $16.97
(Economic Research Service, USDA)

Paul Rozwadowski's Opening Statement

Thank you for joining our call on the dairy crisis that is going on in the U.S. My name is Paul Rozwadowski. I am a dairy farmer from Wisconsin and the chair of the National Family Farm Coalition Dairy Subcommittee. We have on this call dairy farmers and leaders from across the country, Right now, we have only 60,000 dairy farms left in the United States. Regional differences are a thing of the past. Many rural communities are suffering and down to their last dairy farms. The situation in state after state is very dire because we don't have a price that reflects our cost of production.

The current Farm Bill does nothing to address the ongoing crisis in the dairy sector. It continues with the failed MILC program, and contains a very harmful forward contracting provision that only lowers milk prices further. The dairy farmers on this call do not want more taxpayer handouts. We want fairness and justice restored to our dairy industry, so that we can receive our income from the marketplace, not from taxpayers. As it is, a few corporations control the dairy sector, and deep-seated corruption prevents farmers from having any control over their situation. We need a new pricing system that is not so easily manipulated by a few corporate entities on the Chicago Mercantile Exchange. Senators Casey and Specter from Pennsylvania introduced a bill, S. 1722, that would have done this, but it was rejected by the Agriculture Committee.

We need the Department of Justice to finally bring forward its year-long antitrust case against these same corporate entities, namely Dairy Farmers of America and Dean Foods. We would like to commend Senator Russ Feingold for his inclusion in the Senate Farm Bill of some important provisions addressing these antitrust and competition issues, including the requirement of a USDA Dairy Coordinator. The dairy industry has become so consolidated at the retail, processing and cooperative level that many farmers no longer have a choice as to where they sell raw milk. So we need to address the underlying factors that have led us to failed dairy policy in the U.S.

Contact Irene Lin (202) 543-5675