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Farm bill inaction drains milk farmers

Union Leader Correspondent

November 09. 2012 3:58AM
Cows at Echo Farm in Hinsdale munch on breakfast while Beth Hodge milks 100 head of dairy cows in the barn. (NANCY BEAN FOSTER/Union Leader Correspondent)

HINSDALE - The failure of Congress to pass a farm bill before the last session ended in Washington has left some dairy farmers in New Hampshire short on cash at a time when costs to produce milk are going higher, and there doesn't appear to be any immediate help coming.

"We are so frustrated with the lack of passage of a farm bill," said Beth Hodge, owner of Echo Farm in Hinsdale.

Hodge said the problem for New Hampshire stems from the fact that because the bill didn't make it to the floor in Congress, the current version of a program called the Milk Income Loss Contract (MILC) was allowed to lapse in September. For dairy farmers, the program has helped cover the gap between what they're paid for their milk, and what it costs to produce the milk, factoring in issues such as grain and fuel prices, which are now extremely high.

But on Sept. 30, according to New Hampshire Commissioner of Agriculture Lorraine Merrill, the program reverted to its pre-2008 formula, which that doesn't account for factors that increase the cost of milk production, leaving many dairy farmers without any assistance.

"For our farm through most of the late summer/early fall, that meant a check for about $2,000 a month, which certainly was helpful," said Hodge. "Our grain prices are up 20-50 percent from last year, and the MILC payment did help us to make up for some (but, not all) of those increases. With no MILC payment this month, we are struggling to continue to pay our bills."

Merrill, herself a dairy farmer, said that while the price of milk is high, the cost of producing milk is equally high, so there's no room for profit for farmers and many are operating at a loss.

"(F)armers are very nervous with the uncertainty of looking ahead to winter with no safety net program available and feed costs so volatile," said Merrill. "We have seen several dairy farms in New Hampshire sell their herds and quit producing milk in recent months, and we know others are considering getting out of the dairy business after the recent series of money-losing years that have not been compensated for in the shorter periods of profitable price margins."

Hodge said the MILC program was less than perfect, and she was looking forward to the passage of the new farm bill that would have changed the program from direct payments to a margin insurance program to help dairy farmers cover themselves when prices, which are set by the government, fluctuate, or when costs of production increase.

"It doesn't feel very good to take money from taxpayers, so I was happy about the new insurance program," said Hodge. "I actually went to Washington, D.C., in early September to talk with our New Hampshire delegation about how to get the farm bill on the floor."

During the trip, all of the members of the New Hampshire delegation agreed to sign a letter to Speaker of the House John Boehner to get the bill onto to floor, but in the end, "nothing happened," said Hodge.

For dairy farmer Tom Sawyer of Walpole, the whole problem stems from government intervention into things like milk prices and the push to convert corn into ethanol, which causes grain prices to increase. The government breeds dependency on programs like MILC, he said.

"I don't like government programs, but they're involved in everything," said Sawyer. "There's no free enterprise in dairy farming, so we're just trying to keep our heads above water and survive."

Some dairy farmers have opted to withdraw from the wholesale milk game entirely in order to save their farms.

In Winchester, Sarah Costa and Sam Canonica of Manning Hill Farm have decided to go it alone.

"Everything we produce, we process, pasteurize, bottle and distribute ourselves in our own farm milk plant," said Costa. "Situations like (the MILC program lapsing) and fluctuating milk prices set by the government is part of the reason why we decided to go that route."

With only about 120 dairy farms left in New Hampshire, and stiff competition from farmers in California and the Midwest, the lapsing of the MILC program has put an already vulnerable industry at even greater risk.

"I just don't know what will become of the dairy industry in the Northeast," said Sawyer. "I always thought we'd be frugal and survive, but now I'm not so sure."

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Nancy Bean Foster may be reached at

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