The nation’s dairy farmers will be getting a little something extra in their stockings just in time for Christmas.
And though it’s welcome, it really is just a little something:
Justin Brown, vice president and branch manager at First Pioneer Farm Credit, is guessing the typical 100-cow dairy will get a check for $7,136 from what’s being called the Dairy Economic Loss Assistance Payment (DELAP).
Weigh that against an estimated $78,050 loss for 2009 for that same farm and it becomes clear why, though they appreciate the gesture, local dairymen say, at best, it’ll let them pay a bill or two.
“It’s too little too late,” said Cobleskill dairyman John Radliff, who estimates he’s been losing $100 a cow—every month since January.
“It’s a Band-Aid on an arterial wound,” he said. “As far as I’m concerned they can keep the money and figure out a way to cut our cost of production. We need to use the tools we already have instead of giving away taxpayers’ money they don’t have.”
DELAP budgets $290 million to the nation’s dairy farmers to help offset near-record low prices for more than a year.
Eligible farmers will receive a one-time direct deposit payment in the next few days, based on the amount of milk produced from February through July ’09.
Minus administrative costs and a reserve established by Farm Service Agency, the $290 million is expected to work out to 32 cents for every hundred pounds of milk produced.
Though just six months’ worth of milk production is being used to calculate the payments, Brian Sheridan of the Schoharie County Farm Service Agency said that figure will be doubled to approximate a full year’s production.
Like Mr. Radliff, Debbie and John Stanton, who milk 180 cows with their son, Eric, also in Cobleskill, say the USDA checks won’t really accomplish anything.
“I don’t want to sound unappreciative, but it’s going to mean a few thousand dollars for us,” Ms. Stanton said.
“What bill do I put that on? Feed, I guess. But we still owe for this year’s seed and fertilizer…How much longer do they think we can all go?”
Mr. Stanton milks 180 cows and said he probably lost a quarter of a million dollars in 2009 because of low prices.
He estimated his DELAP payment will equal just a few days worth of milk.
“It’s no monumental thing. It’s not going to make us or break us,” he said.
At first, farmers thought they were going to get the emergency assistance on just six month’s worth of milk production.
It wasn’t until she started calling the local FSA, which is administering the program, that Sue Tillapaugh, whose family farms in Carlisle, learned it would apply to a year’s worth of milk.
“And it’s still ridiculous,” she said. “Now it will let me pay parts of two bills. It’s still a drop in the bucket.”
Ms. Tillapaugh believes local farmers haven’t yet hit bottom and worries about what will happen in the spring when it’s time to order things like seed and fertilizer for ’10.
“The human toll isn’t yet evident,” she said. “Milk prices would have to be double what they are—for a long time—for people to be able to dig out of this hole. As long as there’s still food in the store, there is no ‘dairy crisis.’”
There are other “catches” to DELAP, including a six million pound limit on milk eligible for the payments; farmers who cap out will receive a flat $19,200 payment.
According to Mr. Brown’s estimates, a 300-cow farm producing as much milk per-cow as the typical 100-cow dairy will see average losses on the year of $234,150 but a check for $19,200—eight percent of the loss.
New York farmers saw an average of $14.80 for November’s milk, a 50 cent increase over October’s price.
Milk prices are creeping up, but that good news is worrisome too; it means that there will be there will be no Milk Income Loss Contract payments for December’s milk
MILC kicks in when the price of milk drops below a trigger point and paid out 60 cents a hundred pounds for October milk but just 37 cents in November.
“So it’s just going to be a wash,” said Mr. Radliff. “In the end, we won’t be any better off than we already are.”