August 7, 2009

US senate approves additional milk price supports

The US Senate has agreed to provide an extra US$350 million for milk price supports to increase government purchases of surplus dairy products.

Reducing milk supply will lead to higher prices for dairy farmers who are struggling with the lowest prices in nearly 40 years. The price farmers receive for their milk has plunged 41 percent to US$11.30 per cwt, while cost of production is US$18 per cwt.

The increase in the Farm Service Agency budget to more than US$1.6 billion would allow USDA to raise the support price for nonfat dry milk from US$0.92 per pound to US$0.97 per pound. The floor for cheddar blocks would go from US$1.31 per pound to US$1.40 per pound, and the price for cheddar barrels would increase from US$1.28 per pound to US$1.37 per pound.

The amendment to the agriculture appropriations legislation was supported by the National Farmers Union, Vermont Agriculture Secretary Roger Allbee, and state agriculture commissioners or secretaries in 10 other northeastern states.