Washington D.C. (January 29, 2009) - With dairy prices collapsing by over $5 for February, one of the largest drops in 50 years, dairy farmers are confronting their worst crisis since the Great Depression. The Dairy Subcommittee of the National Family Farm Coalition, representing dairy farmers from across the country, today sent an urgent letter to Congress asking for emergency measures to be taken in the economic stimulus package and to ensure some of the benefits go to rural America. Paul Rozwadowski, a Wisconsin dairy farmer and chair of the NFFC Dairy Subcommittee, said, "NFFC for over a year and during the entire Farm Bill debate warned we were in a crisis in the dairy industry. These are the worst economic conditions we have ever faced and they are impacting all farmers, whether you milk 50 or 5,000 cows. It is unconscionable for dairy farmers to have to suffer through these low milk prices and we hope Congress can take immediate steps to rectify the situation. Otherwise, we could soon become dependent on Chinese milk powder for our dairy needs."

The letter to Congress suggests 1.) an emergency $17.50 cwt floor price 2.) At least a $3 per cwt differential on all Class I milk (bottled milk) 3.) inventory management that does not rely on ineffective "voluntary herd buyouts." The cost could be offset by a small assessment on all dairy farmers.

These are temporary measures that are needed to stabilize extremely volatile milk prices and help farmers grappling with high fuel, feed and transportation costs. If Congress refuses to enact any of the previous measures, then NFFC requests that immediate action be taken to provide dairy farmers' some of their lost income through an increase in the MILC payments. With the kind of catastrophic losses we are experiencing, farmers need a MILC payment that reflects 100% of the difference between USDA's national cost of production [$20.90/2007] and the pay price dairy farmers are projected to receive for their milk. Brenda Cochran, a Pennsylvania dairy farmer, said, "Dairy farmers have never liked the MILC program or relying on taxpayer subsidies when we believe the processors should be the ones to pay a fair price to farmers. Increasing MILC payments would be an emergency short term solution - a band aid - to help stop the hemorrhaging of our nation's dairy farms, but it is NOT the solution to the problem of a failed federal pricing system."

In the long-run, NFFC believes the milk pricing system must be reformed and decoupled from the Chicago Mercantile Exchange and begin to address rampant anti-competitive behavior on the part of the few cooperatives and processors who control most of the industry. Arden Tewksbury, a Pennsylvania dairy farmer and head of Progressive Agriculture, said, "The recent $12 million fine by the Commodities Future Trading Commission (CFTC) against Dairy Farmers of America (DFA), the nation's largest dairy cooperative, for price fixing shows how easily manipulated the CME is by our dairy cooperatives, processors and food companies. Dairy farmers need to be asking why prices are crashing and who is behind this since supply and demand have long ceased to function properly in our industry."

In 2007, Senators Bob Casey (D-PA) and Arlen Specter (R-PA) introduced S. 1722, which would have priced milk based on a national average cost of production with an inventory management program to deal with overproduction if necessary. NFFC believes a new pricing system, along with action by the Department of Justice on their ongoing anti-trust case against a few of the nation's leading dairy cooperatives and processors, are the long-term solutions needed to ensure America has a thriving dairy industry.

Loren Lopes, a California dairy farmer, said, "This catastrophe is hitting all farmers, regardless of region. In California, we are already hearing of farmer suicides. We need real solutions that address our broken pricing system. We do not need morally dubious herd retirement programs that other farm groups have pushed that do nothing to address stable prices for farmers."

NFFC believes immediate action is essential before our dairy economy is completely overwhelmed by bankruptcy. The crisis is not only impacting farmers, but agribusinesses, processors, banks, veterinarians and others who make up rural economies. It is urgent for our nation's food security to ensure the survival of our 60,000 remaining dairy farmers. NFFC believes that rural America and our nation's food supply are important enough for consideration in any stimulus package.