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Published July 13, 2010, 01:01 PM

Legislation aims to stabilize milk prices

SOUTH BURLINGTON, Vt. — Forty years ago there were 40 dairy farms in the small town of Rochester, Vt. Now there’s just one.

By: Lisa Rathke, Associated Press

SOUTH BURLINGTON, Vt. — Forty years ago there were 40 dairy farms in the small town of Rochester, Vt. Now there’s just one.

“We are the last one left in our valley. We want to stay there,” said Beth Kennett, who milks 100 cows with her husband and two sons. Newly introduced legislation aimed at stabilizing milk prices is giving them hope that they will survive, she said Monday.

“Our sons on Friday made that commitment to refinance our farm to keep farming there in Rochester. And we could base that on this hope for change that this legislation is proposing,” she said.

The bill, introduced by U.S. Sen. Bernie Sanders, I-Vt., on June 24, would set the amount of milk to be produced quarterly and penalize farmers who produce too much.

The Dairy Market Stabilization Act, co-sponsored by U.S. Sen. Patrick Leahy, D-Vt., and U.S. Sen. Patty Murray, D-Wash., would “bring price stability to the dairy industry and provide family farmers with a fair price for their production — a price that will allow the industry to thrive and family farms to stay in business,” Sanders said Monday in announcing the bill.

“What this says in simplest terms, you have a certain base price in your milk, you produce more, and then you’re not going to penalize everyone else, you’re going to have to pay a fee for it and that’s going to go into a pool,” Leahy said.

In the last 20 years, the dairy industry has suffered through severe price fluctuations. In 2004, the price per hundred pounds of milk rose to $19.30 and then crashed to $11.90 in 2006. In 2007, the price reached $21.80 and then fell to $11.30 in 2009, Sanders said, while Vermont farmers need $17 to $18 per hundredweight to cover their production costs.

The number of dairy farms has dropped from 110,000 nationally to just 65,000, Leahy said. Vermont alone has lost half its dairy farms since 1995.

“It is clear that much more needs to be done and that, finally, we have got to get beyond short-term emergency fixes into a fundamental change in the way that dairy prices are determined,” Sanders said.

But he acknowledged that getting the bill through Congress will be tough. A similar bill has been introduced in the House by U.S. Rep. Peter Welch, D-Vt., and U.S. Rep. Jim Costa, D-Calif.

“I think with all the losses we’ve had dairy farmers want to come together,” Leahy said.

While the concept of managing the supply of milk is becoming more popular among dairy farmers, supporters aren’t necessarily behind growth management.

Neither the farm bureau in Wisconsin, which has the most dairy farms of any state at nearly 13,000, nor the National Milk Producers Federation, a group representing 40,000 dairy farmers around the country, supports Sanders’ bill.

“What it boils down is wondering whether or not trying to forecast what supply and demand are going to be on a global basis in the future is possible and even if that were possible would that effectively eliminate price volatility,” said Chris Galen, a spokesman for the National Milk Producers Federation.

Amanda St. Pierre, who represents the group Dairy Farmers Working Together, which started in Vermont with a mission of stabilizing milk prices by balancing supply and demand, called it “a monumental day in Vermont and American dairy industry.”

“The introduction of this bill begins the process of developing a system in which the over-supply of 2 percent does not create the volatility which has historically lowered the number of operating farms in our state and country,” she said.

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