STRYKERSVILLE — If Congress allows the Dairy Margin Coverage program to expire in December, the nation will face a “dairy cliff” — a price destabilization crisis that could cost dairy farmers, consumers and the federal government.
That’s the warning Sen. Chuck Schumer delivered Tuesday morning at Breezyhill Dairy, a six-generation farm that has been operated by the Almeter family since 1870.
Dairy Margin Coverage, established as part of the 2018 Farm Bill, is a federal insurance program that compensates enrolled farms when the margin between milk prices and feed costs falls below a selected level. It replaced the prior Margin Protection Program, which took effect in 2014.
The 2018 Farm Bill expired this September after being extended a year from its initial expiration, but Dairy Margin Coverage continues until the end of the year.
If Congress doesn’t extend or replace the 2018 Farm Bill before the year’s end, agricultural policy will revert to “permanent law” — parts of the Agricultural Adjustment Act of 1938 and the Agricultural Act of 1949 that remain on the books but have been overridden by successive farm bills since the 1960s.
Those laws would require the federal government to purchase enough milk to drive market prices to $49.43 per hundredweight (cwt.), according to the nonpartisan Congressional Research Service (CRS) — equivalent to 75% of the “parity price” ratio set during a 1910-14 benchmark period, but more than double the $21.43 per cwt. that Class I (fluid) milk sold for last Wednesday, Nov. 20.
The CRS estimates that a return to permanent law would cost the federal government around $17 billion in dairy supports this year, more than 44 times the $384 million in spending the Congressional Budget Office projected under the current policy.
Allowing Dairy Margin Coverage to expire would lead to immediate, massive cost increases for consumers and the federal government and put many farmers out of business, Schumer said Tuesday.
“If the dairy cliff happened, there’d be a recession in this county the next week,” he said.
Wyoming County has long been the top milk-producing county in the state, though it recently fell to second place behind Cayuga County, according to a Nov. 14 report from New York State Comptroller Thomas DiNapoli. Wyoming County farmers sold $304.8 million of cow milk in 2022 — 72.4% of the county’s agricultural output that year. Statewide, that figure is 48.2%.
Breezyhill Dairy co-owner Roger Almeter said the impact of Dairy Margin Coverage expiring would extend far beyond farms.
“If farms don’t survive, tractor dealers, Upstate Niagara has 1800 employees that process the milk and the products that we all love — it’s just so far reaching,” he said. “And if our farm remains viable, just like all the other ones, then all those other businesses do too. Yes, we do use the programs when they’re needed. I hope I never have to find out what happens if we don’t have them.”
Rep. Claudia Tenney, whose district covers most of the GLOW region, says she also supports preserving Dairy Margin Coverage — and hopes to extend it to cover larger operations.
“Last year, I sent a letter to the House and Senate Agriculture Committee leadership pushing to raise the Dairy Margin Coverage Tier 1 coverage level’s 5-million-pound limit to better reflect the consolidation in the dairy industry over the past five years,” Tenney wrote in a statement Tuesday afternoon. “Going into the 119th Congress, I will work to ensure this program is not only renewed but modified to fit the needs of dairy producers.”
Schumer said Tuesday that his colleagues on the Senate’s Agriculture Committee, Debbie Stabenow, D-MI, and John Boozman, R-AR, will have a permanent farm bill ready in time for passage before the year’s end.
--Livingston Co News