Prices have fallen amid plunging consumer demand. At a Senate Agriculture Committee hearing, talk of a solution centers on shipping milk and other dairy products to developing countries.
Reporting from Washington - With dairy prices off nearly 40% from last year's peak, farmers, industry advocates and milk processors filled a Senate Agriculture Committee hearing room Tuesday to discuss lasting solutions to their crisis.
Consumer demand, particularly for cheese, has slipped amid the worldwide economic downturn. But production continued to grow. In September, the price dairy farmers received for 100 pounds of milk was $11.90, according to the U.S. Department of Agriculture, down from a high of $19.50 in June 2008.
The surplus is not easy to eliminate, because dairy cows must be milked -- or slaughtered. With the average cost of producing milk around $18 per 100 pounds, depending on the state, farmers lose money every day.
And their plight, Wisconsin dairy farmer Paul Toft said during the Capitol Hill hearing, affects all Americans.
"Whether it's a furniture store or grocery store, [our money] keeps all these businesses going," he said.
Toft testified that he is losing $7,000 per month.
The hearing was co-chaired by Sens. Kirsten Gillibrand (D-N.Y.) and Bob Casey (D-Pa.).
"There are not many businesses where people do backbreaking labor seven days a week and come out financially worse for their trouble," Gillibrand said.
Much of the talk about solutions centered on exports to developing countries.
If the Chinese drink milk, "we'll find a way to get it there," said Eric Ooms, a New York dairy farmer with 400 cows.
The Obama administration recently signed into law $350 million in emergency aid for the industry.
The USDA had already allocated nearly $1 billion for dairy product purchases and subsidies for the 2009 fiscal year.
Farmers say the milk pricing system needs to be overhauled, something the senators agreed would be looked into when the next farm bill, scheduled for 2012, comes up.