Washington D.C. (February 5, 2009) – The Dairy Subcommittee of the National Family Farm Coalition today hosted an urgent press teleconference outlining the dire crisis in the dairy industry due to an unprecedented $5 drop in raw milk prices for February. Farmers from across the country testified that these were the worst conditions seen in decades while Food and Water Watch, a consumer advocacy group, warned that lower prices to farmers had yet to help consumers at the grocery store and that the loss of family farmers could lead to a dangerous dependence on foreign imports for our dairy needs. NFFC last week sent a letter to Congress requesting emergency relief in the stimulus package. The letter can be found on our website. NFFC believes that the root of the problem lies with a flawed pricing system and a highly consolidated dairy industry and not overproduction as commonly assumed.

Paul Rozwadowski, a Wisconsin dairy farmer and chair of the NFFC Dairy Subcommittee, said, "These are the worst conditions we have ever seen with our income dropping by over 50% from a year ago. Now we have only a fraction of the farmers we used to have, so losing even a small percentage will cause more of a depression in rural economies, with possible food shortages and higher consumer prices and forcing us to rely on imports. Congress doesn't seem to care, and neither do our dairy cooperatives and other dairy lobbying groups."

John Bunting, a New York dairy farmer, placed the blame for volatile milk prices on the fact that milk prices are set by the Chicago Mercantile Exchange, which has been exposed as being highly prone to manipulation by a few corporate entities: "Kraft is one of the lead players in setting the price on the CME and they just admitted they sold less product, but made more money due to raising prices to the consumer. We need to investigate the CME as the lead player in dropping prices to farmers." Bunting further noted that milk supply in the country was not driven by price, but factors such as real estate prices in California: "From 2002-2007, 33 states produced less milk per capita. The handful of states where it increased was due to farmers selling out in California and buying land in places such as New Mexico and Colorado and also Dutch dairy farmers buying farms in the Midwest."

Arden Tewksbury, a Pennsylvania dairy farmers said, "I have been going to Washington for 45 years on behalf of dairy farmers and have never seen such deplorable conditions. There is a lack of concern from Congress and farm organizations and dairy cooperatives to address the problem in milk pricing, which is that the farmers' cost of production is not a factor and that we lack a supply management system. Two years ago, our two Pennsylvania Senators introduced S. 1722, which would have introduced a new pricing system that took into account those two factors. Congress needs to do something if we're to save our remaining farmers."

Bryan Wolfe, an Ohio dairy farmer, noted the consolidation of the industry, particularly the power of Dairy Farmers of America (DFA), the nation's largest dairy cooperative, and how this has led to failures in the pricing system: "In 1980, when we bought our farm, we could have shipped milk to 12-15 different companies, but now we are at mercy at DFA. This leads to price manipulation at the CME as we saw when DFA was fined in December for $12 million for price manipulation. In 2004, NFFC held a meeting in Syracuse, and we got the Department of Justice to look into DFA, National Dairy Holdings and Dean. It was completed in August 2006, but no action was ever taken. We asked the Senate Judiciary Committee for a complete and thorough investigation into DFA and its affiliates. We have had no answer and Senator Leahy needs to stand up and be counted on, but he has not to date."

Joel Greeno, a Wisconsin dairy farmer, further reiterated how the dairy cooperatives and National Milk Producers Federation have failed to advocate on behalf of farmers: "The cooperatives have a charter and sense of duty and obligation to protect farmers, but they grew larger and now are interested more in personal profit instead of the farmer. Jerry Kozak and National Milk Producers Federation have failed to do anything except advocate for more flawed policies, such as a voluntary herd buyout that does nothing to address the broken pricing system that is the real source of our problems." Greeno also pointed out that the MILC program is "grossly inadequate and allows processors and industry to let the price fall and at taxpayers expense, give a pittance to farmers."

Joaquin Contente, a California dairy farmer, said "Conditions here in California have us receiving $10 per cwt when our costs are around $17 cwt. We are experiencing losses of up to $100,000 losses a month, and there have been suicides from some of our producer members. We do not have a functioning marketplace since Kraft, Leprino, and Dean Foods control much of the retail, food service and fluid marketplace and they don't compete against each other. Instituting export subsidies, as the EU is doing, only lowers world market prices with no benefit to producers."

Patty Lovera of Food and Water Watch said that rarely do lower prices paid to farmers translate to lower consumer prices at the grocery store: "We don't think consumers benefit from this drop in price. Last year, it was widely publicized that food prices went up but long term, from 1998-2007, dairy farmers share of the consumer dollar decreased by 25% while retail prices went up 40%. The bigger issue for consumers is what happens when we have no regional and local food supply and have to worry about what replaces that—including possibly imports from China, where you have concerns about the melanine scandal. We're more vulnerable to that every year we lose more dairy farmers."